As the HIM Director, you are responsible for managing the selection of a new Computer Assisted Coding (CAC) product for your department. You have been presented with two options based on an RFI (request for information) from the potential vendors. You will need to perform some calculations before analyzing and making a recommendation for the best vendor contract. Total Costs for Production Coding is $752,000 Total Estimated Increase Training Total Hardware License Costs per Interface in Productivity (Net Product Costs Investment Costs person/per year Costs annual cash flow provided by Amount before taxes) Vendor None 2 Servers @ 3M $5,000 20 x $2,200= $44,000 (facility $18,000 already each using 3M) 15% reduction in coding productivity costs (currently $752,000) Clintegrity 2 servers @20x $4,200 20% reduction in coding productivity $20,000 $12,000 $2000=$40,000 costs (currently $752,000) Part I • Determine the total investment amount based on the information provided. Part II Determine the payback period for each product. This is provided below and also in your Principles of finance for health information and informatics professional book. The formula for payback period: Payback Period = Investment Amount Net Annual Cash Flow before taxes ***To determine the Net Annual Cash Flow before taxes you need to multiple the percentage of reduction in coding staff by the total costs for coding production. (Ex. 15% x $752,000). Provide your calculations in your Word document.
As the HIM Director, you are responsible for managing the selection of a new Computer Assisted Coding (CAC) product for your department. You have been presented with two options based on an RFI (request for information) from the potential vendors. You will need to perform some calculations before analyzing and making a recommendation for the best vendor contract. Total Costs for Production Coding is $752,000 Total Estimated Increase Training Total Hardware License Costs per Interface in Productivity (Net Product Costs Investment Costs person/per year Costs annual cash flow provided by Amount before taxes) Vendor None 2 Servers @ 3M $5,000 20 x $2,200= $44,000 (facility $18,000 already each using 3M) 15% reduction in coding productivity costs (currently $752,000) Clintegrity 2 servers @20x $4,200 20% reduction in coding productivity $20,000 $12,000 $2000=$40,000 costs (currently $752,000) Part I • Determine the total investment amount based on the information provided. Part II Determine the payback period for each product. This is provided below and also in your Principles of finance for health information and informatics professional book. The formula for payback period: Payback Period = Investment Amount Net Annual Cash Flow before taxes ***To determine the Net Annual Cash Flow before taxes you need to multiple the percentage of reduction in coding staff by the total costs for coding production. (Ex. 15% x $752,000). Provide your calculations in your Word document.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
Related questions
Question
please give some introduction of this example.
please give step by step answer.
Transcribed Image Text:As the HIM Director, you are responsible for managing the selection of a new Computer Assisted Coding (CAC)
product for your department. You have been presented with two options based on an RFI (request for
information) from the potential vendors. You will need to perform some calculations before analyzing and
making a recommendation for the best vendor contract.
Total Costs for Production Coding is $752,000
Total
Estimated Increase
Training
Total
Hardware License Costs per
Interface
in Productivity (Net
Product
Costs
Investment
Costs
person/per year
Costs
annual cash flow
provided by
Amount
before taxes)
Vendor
None
2 Servers @
3M
$5,000
20 x $2,200=
$44,000
(facility
$18,000
already
each
using 3M)
15% reduction in
coding productivity
costs (currently
$752,000)
Clintegrity
2 servers @20x
$4,200
20% reduction in
coding productivity
$20,000
$12,000
$2000=$40,000
costs (currently
$752,000)
Part I
•
Determine the total investment amount based on the information provided.
Part II
Determine the payback period for each product. This is provided below and also in your Principles of finance for
health information and informatics professional book.
The formula for payback period:
Payback Period = Investment Amount
Net Annual Cash Flow before taxes
***To determine the Net Annual Cash Flow before taxes you need to multiple the percentage of reduction in
coding staff by the total costs for coding production. (Ex. 15% x $752,000).
Provide your calculations in your Word document.
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