Business Case Studies & Business Publications

University of Virginia Health System: Th...

Eades, Kenneth M.,...

Case

University of Virginia Health System: The Long-Term Acute Care Hospital Project

Eades, Kenneth M.; Mehta, Nili

F-1676 | Published August 27, 2012 | 10 pages Case

Collection: Darden School of Business

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This case is best taught in a first-year MBA finance course and with a series of cases based on cash flow analysis. Its primary objective is to portray the major differences in project analysis for nonprofit organizations compared to for-profit companies and to highlight the unique issues relevant in a health care environment. Students must decide, based on cash flow analysis and nonfinancial factors, whether or not to propose a long-term acute care hospital (LTAC) project to the board of directors of the U.Va. Health System. Students must use the assumptions outlined in the case to create a cash flow analysis and then compute a net present value (NPV) calculation and internal rate of return (IRR) for the project. After assessing the base-case results and sensitivity analysis of the assumptions driving those results, students must decide if the project should be taken to the board of directors.