Established in 1987, ABC Community Hospital not-for-profit is anacute care hospital located in an east coast Metropolitan area.With a staff of nearly 200 physicians and specialists, 800employees and 100 volunteers, they offer a full range of healthcareservices. They are accredited by the Joint Commission onAccreditation of Healthcare Organizations. The hospital has beenprofitable for the last 5 years with a profit margin of 3-4%. Themission of ABC Community Hospital is to provide accessible andcomprehensive healthcare services in a convenient andcost-effective manner to the people who live in our community.

At the last Board meeting, hospital administration and the Board ofDirectors began to discuss a proposal to build a new wing devotedto a Cancer Center and ancillary services devoted to the treatmentof cancer. The new wing would have 30 acute care beds, foursurgical operating rooms, intensive care unit and extensive supportservices, including physical therapy and hospice care. All patientrooms would be private. There is no Cancer Centers within a 200mile radius of the hospital service area.

Now, the Board of Directors has come back with more questions thatthey want you to add to the original plan with 2-3 pages of newcontent:

• Compare and contrast the kinds of decisions that are made inthe Cancer Center capital investment decision analysis for ABCCommunity Hospital.
• What information is needed by the CFO to evaluate the CancerCenter capital investment project? Use the classification ofcapital expenditures and justification of capital expenditures forthis project, and include working capitalmanagement.  
• Who, internally from the healthcare system and externally,should be involved in the capital investment decision process todetermine the feasibility of the Cancer Center?