Question: A well known clinic in the Midwest operates as a not
A well-known clinic in the Midwest operates as a not for profit organization. Typical capital expenditures decisions involve acquiring equipment that will perform medical tests beyond those currently possible at the clinic (hence, adding revenues) and/or perform tests more efficiently than currently (hence, decreasing expenses). To evaluate such expenditures, the clinic uses a discount rate equal to the return on its investment trust portfolio. Explain, briefly, why they do so.
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