In an Excel Spreadsheet:

• Set up a Capital Budget for your selected service or programmatic enhancement. You must include all of the following elements in your budget. To ensure success, go through these methodically one at a time. If you have questions, contact me or post a question in the discussion for the entire class.
  1. Estimate output, output prices, and revenues, including when cash will be received.
  2. Identify the type and quantity of resources needed, input prices, and when expenses will be paid.
  3. Select a discount rate. See your FAQs and module notes for your options. Specifically, you will decide which discount rate to use based on what you know about the MHS case and the programmatic service/enhancement you are proposing.
  4. Once you have chosen your discount rate, calculate the PV of future cash flows using an Excel spreadsheet. Do your calculations in a new tab in the current sheet and then input the number into your budget. This way I can provide guidance on your work.
  5. Select an evaluation measure either the NPV or the IRR - to assess cash flows. Chart the results on the budget Excel worksheet.
  6. Conduct sensitivity analysis using the same Excel spreadsheet. Chart the results.