Capital Project Analysis : Capital Management

According to the hospital’s five-year plan, an investment in capital equipment should boost the quality of services offered at the hospital. Many options of capital investments that hospital could invest in exist. However, this report recommends an investment in the MRI (Magnetic Resonance Imaging) equipment. This equipment involves a large capital investment upfront, but it can be profitable in the end. The hospital has considered factors such as the cost of this equipment, the facilities needed, and the return on investment of the equipment. The above factors are among some of the factors that are considered when buying large capital equipment for an organization such as a hospital (Keefer,

Since Elijah Heart Clinic patient inflow has increased, there are plans for a $75 million dollar expansion and improvement project to manage the patient inflow. The plan is to open a new facility with 100 private rooms and include the latest technology. Not only will there be new construction but the clinic will also renovate the existing facilities. I based my decisions on the focus of the clinic. The focus is to make sure that the changes will continue to provide patients quality care. Also when making my decision, I have to keep in mind that the strategy chosen will result in the success or failure of the clinic. To choose the best option, I had to analyze the cost of funding, the net present value, collateral requirements, prepayment limitations, and deadline for using the fund.

Capital assets are generally purchased to improve quality of care, or to provide needed equipment for a new service or expansion of an existing service. The key element in capital budgeting is that the building or piece of equipment being acquired has a lifetime that extends beyond the year of purchase and it is a capital asset or long-term investment for the hospital. Capital assets are good financial investments for the organization.(Finkler, Ward, & Baker, 2007). The Electronic health record software system is one of the important operational priorities in the US healthcare. The change from paper-based record system to electronic record system supported by technologies and help for reducing errors and

A strong operating and capital budget should align with the strategic goals of Creekside Community Hospital, as well as ensure operational efficiencies and financial longevity. Planning capital purchases continually and for future years will allow Creekside to be competitive, which is a crucial factor in capital budgeting (Gapenski & Reiter, 2016). Vianueva (2011) suggests an inadequate capital budget process leads to a key problem area for hospitals. Cost allocation is a vital component of the capital budget process. Costs must be allocated to the appropriate departments or areas where they are incurred, as well as where revenues are generated. With Creekside Community Hospital exhibiting higher inpatient costs than outpatient costs, the hospital leadership should ensure accuracy so that managers have the information necessary to make sound, financial decisions currently and in the future related to staff support, equipment and supply purchase to name a few.

Influence of internal resources and financial capabilities on financial plan – a resource-based view (RBV) of the hospital will help assess resources within the organization (Lee, Lee, and Pennings, n/a). RBV looks at the firm as a bundle of internal resources and the influence these attributes have on the firm’s competitive advantage and performance. Some of the RBV include human, technological, financial resources, organizational culture, and managerial capabilities (Lee, Lee, and Pennings, n/a). The strategic manager and leadership team will look at the internal resources such as personnel and equipment to assist in the decision-making of the project. New equipment is needed for the new addition, will it be possible to sell the existent old equipment in the department and use that money to cost some of the new purchase. During the construction, some of the services will be limited; the organization needs to consider the possibility of moving some of the personnel to other departments if they meet qualifications to perform new tasks.

The amount of money that can be borrowed has many entities and factors that influence the capital budget of the hospital (Cleverly, Song, & Cleverly). The Allen Pavilion of NY Presbyterian Hospital (NYPH) is projecting that the purchase of an MRI machine for their facility will be a venture worth pursuing. The growth and demand of the small community of Inwood NY currently is transported or sent to other facilities or to the downtown campus Milstein. This increase in demand has taken over the capacity of what the Milstein campus can efficiently serve. The small community pavilion serving this

Capital purchase can be difficult decisions to make, especially when considering the significant costs that are involved in purchasing, installation cost and maintenance. Radiological equipment represents equipment that can greatly enhance the clinical care of patients, but because of their significant initial cost and upkeep there should be care in selection of this equipment. This essay will examine the purchase of a MRI machine for a small nonprofit hospital that caters to a fixed income community.

This paper will focus on the health-tech business and takes a look at Philips’ strategic plan, capacity plan, and how it implements these into its portfolio management process. I will be going over the program management plan and how projects are managed as well as identifying any conflicts in cost, schedule, or quality and how to resolve them. Additionally, there will be a change management plan that focuses on managing organizational and cultural changes. I will also create a resource utilization plan to analyze and plan resources.

Virtually all general managers face capital-budgeting decisions in the course of their careers. Among the most common of these is the either/or choice about a capital investment. The following describes some general guidelines to orient the decision-maker in these situations.

1. How should PDVSA finance the development of the Orinoco Basin? Can you define project finance? Is Petrozuata a project? What are the costs and benefits of using project finance instead of the traditional (debt) finance – as Mr. Bustillos said, PDVSA could have finance the debt internally (p.7 of the case)?

The capital allocation process is an important component for any type of organization but it is extremely important for health care providers (HFMA, 2006). Consequently, the capital allocation process is important for health care providers to consider because they are facing tighter access to limited capital within a highly competitive market (HFMA, 2006). Overall, the capital

Capital investment decisions that involve the purchase of items such as land, machinery, buildings, or equipment are among the most important decisions undertaken by the business manager. These decisions typically involve the commitment of large sums of money, and they will affect the business over a number of years. Furthermore, the funds to purchase a capital item must be paid out immediately, whereas the income or benefits accrue over time. Because the benefits are based on future events and the ability to foresee the future is imperfect, you should make a considerable effort to evaluate

CAPSTONE PROJECT Project Title: APPLICABLE FINANCIAL POLICIES CHANGES THAT CAN BE USED TO ENCOURAGING HOUSE AND HOME OWNERSHIP IN MICHIGAN Submitted by: Submitted to University MBA/MS Program [list one] Capstone Mentor: [name] For University Use Date Received: ______________________________________________ Reviewed by: _______________________________________________ Approved/Disapproved: ______________________________________________ Signature: ______________________________________________ Date: ______________________________________________ Comments: ______________________________________________

The following paper analyzes a project from financial perspectives using the capital budgeting techniques like Net Present Value (NPV) and Internal Rate of Return (IRR).

Investment Analysis for project A,,,,,, ,,,,,, Initial Investment ,,,,,, Cost,"830,000.00",,,,, Installation cost,"40,000.00",,,,, total investment,"870,000.00",,,,, ,,,,,, Summarized Profit an Loss Account for Product A,,,,,, year,0,1,2,3,4,5 Revenue (EBIT),,"250,000.00","270,000.00","300,000.00","330,000.00","370,000.00" Depriciation,,"174,000.00","174,000.00","174,000.00","174,000.00","174,000.00" EBIT,,"76,000.00","96,000.00","126,000.00","156,000.00","196,000.00" Tax @ 40%,,"30,400.00","38,400.00","50,400.00","62,400.00","78,400.00" PAT,,"45,600.00","57,600.00","75,600.00","93,600.00","117,600.00" ,,,,,, ,,,,,, ,,,,,, Computation of Net cash flow from Project A,,,,,, ,,,,,, Year,0,1,2,3,4,5 Investment,"-870,000.00",,,,, PAT,,"45,600.00","57,600.00","75,600.00","93,600.00","117,600.00" Depriciation,,"174,000.00","174,000.00","174,000.00","174,000.00","174,000.00"