Case Study: Houston Dialysis Centre
Question 1
Houston Dialysis Center is among the several departments of Houston General Hospital; which is a full service and nonprofit-making institution. This factor indicates that as much as some profits are realized from operations in other departments of the hospital, the hospital’s focus remains as a center for providing care to the patients. Since this is the facility’s focus, it was justifiable for the hospital’s chief finance officer to prioritize the plight of outpatients who needed more space at the hospital. Furthermore, dialysis patient’s plight was also taken care of through the plan to construct a dialysis center away from the outpatient’s premises. It was therefore unjustifiable for Linda to quit the hospital just because she was prone to lose her bonus by the end of the year. Her decision to quit depicted her as someone who did not value the focus of the facility. The dialysis center on the other hand was not going to suffer from profitability instead; they were on the verge of experiencing their financial state based on their actual cost basis.
Question 2 The initial methodology of fund allocation seem unfair since it provided a lee way for other departments ride to suffer while others could benefit by paying …show more content…
This is because the initial facility cost of $ 400,000 per year during the loan period could yield $ 8,000,000 by the end of 20 years a figure that is double the cost of construction and moving of equipments in the newly constructed facility. It therefore indicates that the actual facility cost minus the construction and moving cost was sanding at $ 200,000, which is half of the total facility cost charged initially. This figure could even be less depending on the amount of interest charged by the bank since the interest was also included in the initial facility cost of $
Question 1
Houston Dialysis Center is among the several departments of Houston General Hospital; which is a full service and nonprofit-making institution. This factor indicates that as much as some profits are realized from operations in other departments of the hospital, the hospital’s focus remains as a center for providing care to the patients. Since this is the facility’s focus, it was justifiable for the hospital’s chief finance officer to prioritize the plight of outpatients who needed more space at the hospital. Furthermore, dialysis patient’s plight was also taken care of through the plan to construct a dialysis center away from the outpatient’s premises. It was therefore unjustifiable for Linda to quit the hospital just because she was prone to lose her bonus by the end of the year. Her decision to quit depicted her as someone who did not value the focus of the facility. The dialysis center on the other hand was not going to suffer from profitability instead; they were on the verge of experiencing their financial state based on their actual cost basis.
Question 2 The initial methodology of fund allocation seem unfair since it provided a lee way for other departments ride to suffer while others could benefit by paying …show more content…
This is because the initial facility cost of $ 400,000 per year during the loan period could yield $ 8,000,000 by the end of 20 years a figure that is double the cost of construction and moving of equipments in the newly constructed facility. It therefore indicates that the actual facility cost minus the construction and moving cost was sanding at $ 200,000, which is half of the total facility cost charged initially. This figure could even be less depending on the amount of interest charged by the bank since the interest was also included in the initial facility cost of $