Scenario: Imagine that you have just stepped into a new role as the office manager for a very successful clinic. The clinic is a conglomeration of physicians who offer specialized care. One of the physician's groups in the clinic would like to purchase an MRI machine. Currently, clients who need an MRI must schedule an appointment at another facility, adding time and cost to any treatment they may need. The machine will be available for all the physicians in the clinic and will require additional staff to operate the equipment and the office area where it will be housed.

1.Prepare acost-benefit analysisby using the template below

(Excel spreadsheet)to present to the physicians so they may decide whether to move forward with the purchase. Be sure to consider the non-monetary costs, such as productivity, as well as the non-monetary benefits, such as improved customer satisfaction. Although these may be difficult to quantify, they are important costs and benefits that must be considered.

2.Answer the following below based on the cost-benefit analysis you created:

How a cost-benefit analysis aligns with organizational needs

Explain the concept of opportunity cost.

Explain how the cost-benefit analysis aligns with organizational needs and future growth.

Recommend a plan of action that is supported by the cost-benefit analysis. (Should the clinic purchase the MRI machine, or not?) Reference specific areas of the analysis in your recommendation.

COST-BENEFIT ANALYSIS TEMPLATE Step 1: Enter cost amounts as future value (FV) expectations. The future value will be automatically converted to present value (PV). Step 2: Enter benefit amounts as FV expectations. The FV will automatically be converted to PV.

Step 3: Subtract the total PV benefits from the total PV costs to get the net benefit. Costs Current Year (CY) CY +1 CY +2 CY +3 CY +4 CY +5 Total Costs Total Costs (Future Value) $- $- $- $- $- $- Total Costs (Present Value) $- $- $- $- $- $- $- blank row Benefits Current Year (CY) CY +1 CY +2 CY +3 CY +4 CY +5 Total Benefits Total Benefits (Future Value) $- $- $- $- $- $- Total Benefits (Present Value) $- $- $- $- $- $- $- blank row Present Value Discount Rate 2% PV Denominator 1.00 1.02 1.04 1.06 1.08 1.10 Net Benefit $- End of worksheet