It has been a wonderful 10 weeks learning from Dr. Gary and virtually
interacting with each of you. The macroeconomic variable that I
believe corporate financial managers should be preparing for in the
next 5 – 10 years is the rising interest rates. Interest rates have a
significant influence on financial markets. Interest rates also affect
customer spending which affects inflation. A decrease in customer
spending will result in a decrease in demand for products and
services, meaning prices will not rapidly rise.
There are many concepts and skills I’ve learned and developed in this
course that will help me in my professional life. I currently work in
hospital administration as a project manager for Bon Secours Mercy
Health (BSMH). Occasionally, I’m asked to either build or evaluate
proformas for different capital projects. The understanding of Net
Present Value (NPV) and Internal Rate of Return (IRR) are key to the
acceptance to a project. For example, a few weeks ago I was asked to
evaluate whether it would be financially responsible to expand one of
our outpatient physical therapy sites. After gathering data and
putting together a proforma, based on the initial capital, BSMH
weighted average cost of capital (WACC), and future cashflows (for 5
years), both the NPV and IRR came out negative. My team and I
evaluated other factors such as projected market service line growth
and other options for our patient population and decided on rejecting
the expansion. Working on this project made me reflect on milestone
3 and appreciated the concepts that we learned.
