Jones Memorial Hospital [Case 20, P.129]. Write a paper of 5 to 10 pages (APA Format), noting at least four peer review sources; on the capital budgeting decision of the two competing technologies. The uniqueness of this case stems from the fact that one of the technologies can move patients from an observation bed to an outpatient setting, which frees up bed days for other purposes (a backfill opportunity). The case also includes a simple replacement decision. In addition to the quantitative analysis, the case involves some interpersonal dynamics between the medical director, who wants the latest technology regardless of cost; the administrative director responsible for cost control; and the CFO, who must evaluate the decision’s impact on the entire organization. Analyze and discuss whether the two systems have the same financial risk. In other words, are the cash flows being discounted equally risky? If not, why not? Modify your analysis to incorporate differential risk if you believe it exists. Discuss and defend your final recommendation regarding the replacement of the first system.
