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Calabash Community Hospital
Schill, Michael J. Case F-1946 / Published April 15, 2020 / 6 pages.
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Product Overview

This case considers a $10 million investment in an outpatient surgery center by a not-for-profit community hospital in rural South Carolina. A member of the purchasing department, R. D. Scott, is invited to complete a discounted cash flow (DCF) analysis of the investment opportunity to help quantify the financial costs and benefits of the project in this not-for profit context. The analysis maintains substantial uncertainty regarding a number of key parameters.


Learning Objectives

The case could be used for the following learning objectives: 1) Introduce students to the mechanics of a simple DCF analysis of a yes/no capital-investment decision. 2) Consider the principle of incremental analysis in identifying relevant cash flows for a project. 3) Employ scenario analysis to quantify estimation uncertainty in key assumptions. 4) Explore the applicability of DCF analysis in the not-for-profit arena.

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  • Overview

    This case considers a $10 million investment in an outpatient surgery center by a not-for-profit community hospital in rural South Carolina. A member of the purchasing department, R. D. Scott, is invited to complete a discounted cash flow (DCF) analysis of the investment opportunity to help quantify the financial costs and benefits of the project in this not-for profit context. The analysis maintains substantial uncertainty regarding a number of key parameters.

  • Learning Objectives

    Learning Objectives

    The case could be used for the following learning objectives: 1) Introduce students to the mechanics of a simple DCF analysis of a yes/no capital-investment decision. 2) Consider the principle of incremental analysis in identifying relevant cash flows for a project. 3) Employ scenario analysis to quantify estimation uncertainty in key assumptions. 4) Explore the applicability of DCF analysis in the not-for-profit arena.