6.3 Capital Budgeting - One of the most important aspects...

This preview shows page 1 - 2 out of 2 pages.

One of the most important aspects of corporate finance is capital budget which can also be called strategic asset allocation (Ross, Westerfield, and Jordan, 2016). Capital budgeting allows organizations to make informed decisions about assets such as equipment, buildings, and new product line. In capital budgeting answers related to value and profitability are answered. At the organization in which I work, an investment greater than $5,000 is considered a capital investment and must go to the administrative team and board for approval. In the capital request, managers must persuade the administrative team and board how the investment will benefit the hospital. In addition, the manager must calculate and answer questions such as net present value and discounted cash flow. Recently, I submitted a capital request to upgrade our nurse call system. The current system we had was old, failing, and creating a safety issue for our patients.

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture