Creation of a Nursing Program Sarah Hink Matt Downs For Dr. Wanda Stutts 12/9/08

Alternative projects Appalachian State University has started a new nursing program under the College of Fine & Applied Arts The nursing program is currently working to construct a new building on donated land If this was not to happen, the nursing program could remain in the same building it currently shares with other programs

Standing Beneficiaries would include: ◦ Appalachian State University ◦ Future nursing students ◦ Local and regional hospitals ◦ Local and regional citizens (i.e. improved healthcare) Cost would affect: ◦ Appalachian State University

Impacts COST ◦ Building ◦ Equipment and supplies ◦ Staff salary ◦ Fees BENEFITS ◦ Higher enrollment ◦ Increases supply of nurses ◦ Prestige for the University

Quantitative Impacts Cost Impacts ◦ Building dedicated to the nursing program ◦ 8 Beds ◦ 6 Exam Tables ◦ Annual Supplies ◦ Salaries for 30 faculty members ◦ Equipment

Quantitative Impacts Benefits Number of Graduates (low) Per Year36 Number of Graduates (high) Per Year108 Number of Living Alumni today90,000 Estimated number of living alumni in 30 years 162,500 Estimated cumulative # of nursing graduates over 30 years 2,916 Average Nursing Salary$65,000

Survey Results

Having a nursing school will benefit Western North Carolina by having a larger supply of nurses and could help maintain and improve the level of health in North Carolina. Knowing this, how much would you be willing to pay more in tuition or fees, even if you are not a nursing student, if there was a building designated for the nursing program?

Survey Results

As an alumnus, how much more would you be willing to donate to Appalachian if there was a building donated to the nursing program?

Monetize all market and non-market impacts One-time Costs$ Building50,000,000 Beds28,000 Tables3,600 Equipment200,000 Total Annual Costs (Over 30 years) $ Supplies277,500 Faculty salaries48,150,000

Monetize all market and non-market impacts Tuition will transfer from nursing students to the university Benefits$ Alumni Donations for 20083,411,000 Total Alumni Donations over 30 years ( ) 143,546,250 Nursing Alumni Donations over 30 years (Cumulative) 1,564,967 Nursing Salaries over 30 years (Cumulative) 189,540,000

Present Values of Benefits & Costs Benefit Discounting ◦ Best Case (2% Discount Rate)  $105,503,489 ◦ Worst Case (7% Discount Rate)  $25,104,908 Cost Discounting ◦ Best Case (7% Discount Rate)  $12,960,561 ◦ Worst Case (2% Discount Rate)  $54,466,817

Net Present Value of each Alternative Best Case Benefit/Best Case Cost ◦ NPV = $92,542,928 Best Case Benefit/Worst Case Cost ◦ NPV = $51,036,672 Worst Case Benefit/Best Case Cost ◦ NPV = $12,144,347 Worst Case Benefit/Worst Case Cost ◦ NPV = -$29,361,909

Perform sensitivity analysis over uncertain issues WTP in donations Number of donations Capital cost Discount rate Number of graduates

Issues unaccounted for Benefits ◦ Improved health in the Southeast ◦ State grants Costs ◦ Electricity and other utilities

Make a recommendation With the shortage of nursing jobs available in the southeast, the Appalachian Nursing program would greatly benefit the supply of nurses over time. With the positive impact of more nurses and improved healthcare in the southeast, constructing a building would be in the best interest of Appalachian to attract students, our future nurses. Assuming the nursing graduates donate back to the nursing program at the same average rate as the rest of the programs at Appalachian, benefits would exceed costs over time.