Fin- Ct 9

Case Study: Rationing Available Capital

For this assignment, imagine that you are now the Chief Operating Officer of a large hospital in Riyadh. As part of your duties, you are to approve and allocate the necessary funds for the upcoming year’s major capital expenditures. There are two major requests and unfortunately, the hospital simply cannot afford both. The first request comes from facilities management. They have submitted the proposals and costing information for a major five-story parking structure. Complaints about limited parking arise from staff and patients on a daily basis. You ponder the hospital’s desire to increase services and realize that this is certainly worth considering. However, on an equal level of need, the medical department has submitted a request for an upgraded and expanded operating room including the addition of robotic surgical assisting devices (DaVinci).

In this proposal to the Board of Directors, analyze the steps you would use in determining which one will be funded this year and which one will be funded next year. Will you use surveys, if so will they be available to the public, employees only, or both? Will you favor the parking facility as it will generate income or will you favor the increase of technology as it lends itself well to marketing? Who will you bring into the decision-making process? As you endeavor in this assignment, the thought process is more critical than choice as there is no right or wrong answer.

Your proposal should include the following components:

A one-page discussion identifying the process of capital investment decision making, using citation and supporting reference articles.
A two-page proposal including steps in determining the funding:
Assessment (survey, target audience, etc.).
Compare and contrast both options.
Final proposed decision with supporting spreadsheet.

Your paper should meet the following structural requirements:

Three pages (not including title or reference page).
Excel spreadsheet which supports your position.
Formatted according to APA
Provide support for your statements with in-text citations from a minimum of four scholarly articles.

Solution Preview

Capital Investment Decision Making

Capital investment decision making entails the allocation of investment funds effectively to ensure the best possible returns from the investment. Primarily, this entails the evaluation of the investment and the allocation of capital based on the project requirements, a critical aspect of the decision-making process (Rasmussen, 2016). Notably, there are different criteria’s for selecting the appropriate capital investment decision. For instance, some companies can emphasize investment projects that ensure profitable returns in the short run while other firms can assert the need for long-term growth (Rasmussen, 2016). Nevertheless, the important aspect of the capital investment decision making is increasing the organization’s value by partaking the appropriate project at the right time.

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