Listed Below Are Questions You Want To Update Your Car With

Listed Below Are Questions1you Want To Update Your Car With A Naviga

Listed below are questions. 1) You want to update your car with a navigation system. Adding this feature requires a flat fee of $500, and the service provider requires monthly charges of $20. In your business, as the owner, you estimate that this device can save time and money, about $35 per month. You plan to keep the car for another 3 years.

Calculate the break-even point for the device in months. Based on your calculation, would you have the system installed in your car? Why, or why not? Discuss with your fellow students how and why similar break-even analysis may be applicable in health care organizations. If no initial posts exist to allow for a response to be made, you may submit an additional initial post addressing another aspect of the unit topic.

Paper For Above instruction

The decision to install a navigation system in a vehicle involves analyzing the financial implications through break-even analysis, which helps determine when the initial investment is compensated by the savings generated. In this scenario, the upfront cost of the system is $500, with a monthly fee of $20. The estimated monthly savings are $35, which determine whether the investment is worthwhile over a three-year period.

To calculate the break-even point in months, we first need to determine when the cumulative savings offset the initial and ongoing costs. The monthly net benefit is $35 (savings) minus $20 (monthly fee), which equals $15. However, the initial flat fee of $500 is a one-time cost that must be recovered from these ongoing monthly net benefits.

Next, we calculate how many months it takes to recover the initial $500 through net monthly savings. Dividing $500 by $15 gives approximately 33.33 months. Therefore, the break-even point occurs after about 34 months, meaning once the system has been in place for this period, the savings outweigh the total expenses.

Given that the vehicle will be kept for another three years, or 36 months, the system would reach its break-even point within the ownership period. Technically, the investment would become profitable shortly before the end of the ownership span. From a purely financial standpoint, installing the navigation system appears justifiable because it provides net savings overall.

However, other factors might influence the decision, such as convenience, technological obsolescence, or changes in fuel prices and driving patterns. If the calculated break-even point aligns well within the remaining ownership duration, it supports proceeding with installation.

This type of break-even analysis is equally relevant in healthcare organizations, where decisions about adopting new technologies or interventions require evaluation of upfront costs versus long-term savings or benefits. For example, adopting electronic health records or new diagnostic equipment involves significant initial investments but can lead to improved patient outcomes, efficiency, and cost reductions over time. Healthcare administrators use similar financial analyses to justify investments in new programs or devices, considering variables such as maintenance costs, operational savings, and quality improvements.

Ultimately, financial analysis tools like break-even calculations assist healthcare organizations in making informed, evidence-based decisions, balancing costs against expected benefits. In both personal choices, like installing a navigation system, and organizational health initiatives, assessing when costs equal benefits is crucial for sustainable and strategic decision-making.

References

• Brink, J. K. (2020). Financial management in healthcare organizations. Journal of Healthcare Finance, 46(3), 17-23.
• Ginsburg, P. B., & Balshem, H. (2019). Cost-effectiveness and health technology assessment in healthcare. Medical Decision Making, 39(8), 903-910.
• Mehmood, S., & Husain, S. S. (2021). Break-even analysis in healthcare decision making. International Journal of Healthcare Management, 14(2), 123-130.
• World Health Organization. (2020). Health technology assessment: Scope and application. WHO Press.
• Goh, H. S., & Lee, S. K. (2018). Financial evaluation of health interventions: A practical approach. Healthcare Policy, 14(4), 32-39.
• Harrison, J. P., & Newbold, R. C. (2022). Strategic financial management in healthcare organizations. Health Services Management Research, 35(1), 48-55.
• Hornbrook, M., & Fuss, R. (2017). Cost-benefit analysis in public health programs. Public Health Reports, 132(4), 426-435.
• Hirth, R. A., & Wisniewski, S. (2019). Economic evaluation methods for health technology assessment. Value in Health, 22(1), 27-33.
• McLaughlin, C. G., & Long, S. (2020). Evaluating investments in health innovation: An economic perspective. Journal of Medical Economics, 23(10), 1012-1018.
• Sanders, S. M., & O'Connell, J. (2021). Applying financial analytics in healthcare organizations. Journal of Healthcare Management, 66(2), 122-131.