Building a Business Case Investment evaluation and recommendation Select the

Building a business case investment evaluation and

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Building a Business Case Investment evaluation and recommendation Select the recommended option based on comparative evaluation Objective-based evaluation methods: Force Field Analysis Multi-Objective Multi-Criteria (MOMC) Financial evaluation methods: Whole lifecycle cost analysis Payback period Discounted Cash Flow (DCF) Net Present Value (NPV) Internal Rate of Return (IRR) Real Options Valuation (ROV) Balanced Score Card
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Building a Business Case Investment evaluation and recommendation Example Objective Increase a regional hospital’s capacity to cater for patients by 20% Options Option A: Renovate and extend current facility by 95 beds (2 beds per room) Cost: $68m Duration: 12 months Option B: Build a new facility in a nearby town (single bed rooms) Cost: $272m Duration: 24 months (in two phases)
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Building a Business Case Investment evaluation and recommendation Force Field Analysis Driving Forces Opposing Forces Driving Forces Opposing Forces OPTION A OPTION B Uncertainty of new location’s impact on market share Higher patient density 1 5 Lower patient density allowing reduction in staff 4 Lower patient density reducing infection rates 5 Competitive disadvantage as patients prefer single rooms 4 Greater capital investment needed 5 Better marketability as patients prefer single rooms 4 Lower capital investment 5 Lower market uncertainty 2 Greater business disruption (temporary loss of revenue) 4
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