Review Your Answers Problem 146 Write Brief Memo

Review your answers to problem 14.6.

14.6  The director of capital budgeting for Big Sky Health Systems, Inc., has estimated the following cash flows in thousands of dollars for a proposed new service:

 

Write a brief memo to the board of directors for Big Sky Health Systems Inc. explaining the results of your calculations regarding the new service. Is the new service financially viable? What recommendations would you make to the board regarding this service? Would the recommendation be the same if there was an opportunity cost involved of $15,000 (total) in today’s dollars obtained by renting the space involved in the new service to an outside entity for 3 years? Why or why not?

Your memo should be no more than 250 words in length. You should reference appropriate supporting documentation, such as calculations from your other assignment, but you need not reproduce the calculations in their entirety.

All sources, including course materials, must be cited in text in APA style.

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