Reference no: EM133168756

Question - The capital budgeting decision of the two competing technologies. Since patients may be moved from an observation bed to an outpatient environment using one of the technologies, this instance is one of a kind (a backfill opportunity). In addition, a straightforward substitution must be made in this scenario. There are interpersonal dynamics at play here, too, between the medical director, who wants the newest technology regardless of cost, the administrative director responsible for cost management, and the CFO, who has to examine the decision's influence on the whole business.

Discuss whether or not the two systems have the same level of financial risk in comparison.

Furthermore, are all discounted cash flows equivalent in risk? Not at all, why not?

Adjust your analysis to take into account the possibility of differential risk.

Defend and explain your decision to replace the original system.