Capital Project Analysis : Capital Management

896 Words4 Pages
Healthcare organizations, like any other company, needs to make the right capital investment decision. This is done by assessing several aspects of an investment and allocating the proper resources to meet those requirements. Capital project analysis plays an important role in the decision making process. The purpose of this paper is to describe the kinds of decisions made by a capital investment decision analysis. Secondly, the four stages of the capital decision-making process and the information needed to evaluate a capital investment project will be highlighted. The kind of decisions made by capital investment analysis involves comparing the different capital investments of the organization and deciding on which will create the most value for the organization. Depending on the size of the organization, and the amount of resources they have available to them, the decision process is often hindered by certain constraints. According to Berwick et al. (2008), the amount of capital a health organization can invest, plays a major role in the types of investments they make. For example, if the amount of resources available to the organization is limited, it places constraint on the choice of the firm over certain project investments. This is particularly important in the healthcare industry, which has to constantly adapt to better serve the needs of patients, because medicine is never static and there are always new technology and tools being created every year; therefore, to

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