Evaluation of Healthcare Corporation Capital Projects
In MBA Fpx 5014 Assessment 2, Healthcare Corporation is a company that manages hospitals, outpatient clinics, surgical and orthopedic hospitals, urgent care centers, and ambulatory surgical centers. This corporation works tirelessly to make sure that its partner collaborating organizations are equipped, in the worst moments, to provide unparalleled products and services to the clients. Maria Gomez, the CFO, takes pride in helping supporters and other shareholders feel good about their investment decisions in the company, primarily when it comes to utilizing the money provided by the shareholders for the healthcare needs of the Healthcare Corporation.
The company’s internal culture and values are shaped by an original organizational model intended to promote community engagement and produce productive citizens. This model involves children and families within interactive learning environments. These services typically attend to the concerning needs of at-risk youth and families dealing with negative human conditions that directly impinge economic advancement. The mission of the company also includes nurturing partnerships with other leaders from different economic sectors who have a similar vision towards social and educational reform in impoverished rural areas.
Capital Budget & Project Option Evaluation
Budgeting is critical for the planning stage, which is done by both federal and local governments as well as municipalities. It is essential for an organization to prepare a budget each year to capture and manage the total revenue and expenditure related to the service they provide in order to facilitate funding governance (Krueger, 2011). Many scholars think performance measures could serve as an alternate bottom line to easily achieve obscure and contradictory goals and enable political principals to bypass the information deficit advanced by local government agents (Moynihan, 2011). For instance, local governments appreciate the concept of performance measurement, as it provides an uncomplicated and neutral method of managing and enhancing government activity in the prevailing complex realities. Reff: MBA 5014
Capital Budgeting is one of the processes that companies exercise in order to allocate finances towards the growth of the company. This comes with a lot of stakeholders that are regarded as possible contributors to business development, stability, and flexibility. As a result of pursuing capital budgeting, businesses unlock more opportunities in which they can succeed over time monetarily. Political influence and their discourse come at the top during this process because businesses tend to rely on government spending for the majority of their assistance. This enables them to safeguard their existing assets while creating new ones that are out of the security that such regulations would offer. Net Present Value (NPV) is used to capture the future value of cash flows in terms of today’s dollars (Gallo, 2014). In comparison to other methods of measuring profitability, MBA Fpx 5014 Assessment 2 Evaluation of Healthcare has a higher stand-alone value because it gives a distinct figure that can be utilized for comparison by the managers and the present value of the investment.
MBA Fpx 5014 Assessment 2 Evaluation of Healthcare
The major focus of the Payback Method in Capital Budgeting is the period, given in years, which a certain business takes to recover an investment made in a project or an asset. In reference to a healthcare organization, some of the projects or assets would be successfully completed medical procedures, equipment sold, expanded practices, and even advertising expenditures that could help attract more clients. When conducting this calculation, businesses need to incorporate the cost involved in making the investment and the benefits after tax that the investment brings about. Adelman and Marks observed that “the main disadvantages of this method are that it does not take into account the time value of money, and it often results in short-term investments or fast payback periods” (Adelman & Marks, 2009, p. 308). Apart from these, research indicates that the Payback Method provides ease of computation and explanation.
Marketing Promising Method
By using integrated marketing techniques, brands can focus on critical industry-specific data, information, and regulations that reflect the sustainability of the organization. When the most crucial choices are made in the organization, leaders are expected to select the most promising methods that analytically add growth to a brand’s outlet channels, customer segments, customer relationships, and revenue. As new technology continues to greatly influence consumers’ choice of products and services, leaders in all the branches of the economy build and/or exist in a controlled environment that seeks to regulate, defend, and nurture brand development, which enhances the competitive edge in business development that moves beyond what has been referred to as marketing. This does not necessarily mean that traditional marketing is repressing any of its elements because, on the contrary, many brands still use traditional features when stepping closer to an overall marketing strategy employing a marketing automation setting (Todor, 2016).
Related Assessment: MBA FPX 5014 Assessment 1 Financial Condition Analysis
Perception 20/20 uses integrated marketing and achieves results in different geographical locations. This criterion is based on geo-demographic, psychographic, and behavioral market segments, ensuring efficient resource allocation and customer satisfaction (Claessens, 2016). Leveraging these market parameters, the leaders of Perception 20/20 Studios have played a vital role while making crucial campaign success-enabling decisions. As Iannuzzi notes, these are clearly measurable, substantial, accessible, and differentiable, and hence, the criteria are highly useful and pro-actively measurable to the institution’s social contribution (Iannuzzi, 2014). This implies that the clients, donors, customers, and other stakeholders will easily appreciate the impact the brand’s product and services have on their lives.
The following three projects A, B, and C are being examined in order to decide which of the follows provides the best net present value, internal rate of return, payback period, and profitability index in relation to stakeholder value.
Project A: Major Equipment Purchase
- It’s introduced another product which could be purchased for a price of $10 million. The equipment will reduce sales costs by 5 percent per calendar year over the next 8 year.
- Furthermore the device may be offered for sale at the end of the term at a price from $500,000.
- A business that is relatively secure can be predicted to have an average of 8 percent.
- The straight-line technique employed for the MACRS 7-year period is an approach to lower the costs of devices.
- In the initial year, annual sales will be about 20 million. The amortization rate will be the same over the next seven years.
- Prior to launch, the was at the equivalent of 60.
- The tax-free benefit from dividends can be said to be a minimum of 25 percent.
Project B: Expanding of Three Additional States
- This expansion of HTML0 into three states is expected to increase revenue and costs by 10% every calendar year over five years in a row.
- The sale of the prior fiscal annual revenue of $20.
- The cost of the initial investment is expected to at least $7 million. Initial investment for working capital net sum of 1 million dollars. The working capital has to be reimbursed at the close of the five-year period.
- The marginal tax for businesses is thought to be 25.
- It’s an investment with a high risk since the ROI on this venture is approximately 12 percent.
Project C: Marketing/Advertising Campaign
- A major new marketing/advertising campaign, which will cost $2 million per year and last 6
- It is expected that this promo will enhance revenues, and revenues will rise by 15% each year.
- The overall sales in the prior year’s total was twenty dollars.
- A marginal tax rate for corporate taxes is approximately 25-25-25-25-25.
- When it comes to the case of a moderate risk investment, the minimal yield for an investment of 10.
After computing the NPV, payback period, profitability index and internal rate of return it can be concluded that Project A returns the best profit for shareholder value. This option overall will yield the company the best return on its investment.
| Projects | Net Present Value | Payback Period | Profitability Index | Internal Rate of Return |
| Project A: | ||||
| Major | ||||
| Equipment | ||||
| Purchase | $44,262,268.65 | 1.36 | 5.43 | 79.79% |
| Project B:Expansion | ||||
| into Europe | $20,616,672.24 | 1.20 | 3.58 | 86.34% |
| Project C: Marketing or AdvertisingCampaign | $33,470,903.72 | 1.23 | 4.84 | 90.36% |
Recommendations
In tackling each of the project proposals, the execs of the corporation have to follow clear procedures to get their capital budgeting and shareholder value requirements. This way, they start commanding the conversation on their quality. The first quality management objective at this stage is for project leaders to understand quality in the context of the role they are expected to assume. This is going to be achieved through helping those working on project deliverables with sufficient training and scrutinizing their educational and professional experiences.
The next goal could relate to ensuring that the project concentrates on finding a minimum of seven possible venues that participants can visit that will help them learn how to contribute to the organization’s growth. MBA Fpx5014 Assessment 2 Evaluation of Healthcare venues should be role-specific to the project ideas that individuals are expected to undertake. This will also help establish contacts with participants and external partners that will enhance the growth prospects. It is imperative for participants and project leaders to appreciate the value of doing their jobs effectively as team members. It means they have to know how to perform proper and acceptable conduct in the course of executing their responsibilities.
Conclusions
As the short-term and medium-term goals progress, a diverse range of events will need to be handled in order to realize the full promise of the product. MBA Fpx 5014 Assessment 2 Evaluation of Healthcare means being on time, acting professionally, and most importantly, being enthusiastic about the work that we do. MBA Fpx 5014 Assessment 2 Evaluation of Healthcare due diligence that is involved in transitioning this project from its inception to its success story. There will need to be several conversations and meetings to understand the project goals impacts.
One tool that might help in reaching every project goal is the event chain methodology approach, which helps prepare and assess the readiness of each project leader and their capability to manage any given project. In so doing, the PM is able to evaluate the commitment and approaches of all volunteers and participants to enable team cohesion and ensure that there is progress towards completing the project objectives within the discussed time. Smart PMs understand the importance of the different stakeholder’s input and feedback so that they can improve the project before it is completed. This also suggests that the PM has the ability to liaise with various external organizations that are willing to help with the different needs that arise during project execution.
References
Adelman, P. J., & Marks, A. M. (2009). Entrepreneurial Finance. Upper Saddle River, New Jersey, United States.
Claessens, M. (2016, June 27). MARKET SEGMENTATION CRITERIA – HOW TO SEGMENT MARKETS. Retrieved from Marketing Insider: https://marketing-insider.eu/market-segmentation-criteria/
Todor, R. D. (2016). Blending Traditional and Digital Marketing. Bulletin of the Transilvania University of Brasov Series V: Economic Sciences, 51–56.