Part 1
You have been hired in the finance department at a large, metropolitan for-profit hospital....

Question

Part 1
You have been hired in the finance department at a large, metropolitan for-profit hospital. Your duties are very important to the entire hospital in terms of financing operating costs. Additionally, you are also in charge of 3 employees who work under you to help with the day-to-day accounting activities. Your role includes budgeting, managing the general ledger accounts, utilizing financial formulas to perform accounting activities, and training and development of your 3 employees. This professional career is exciting and challenging for you but is also enjoyable and rewarding as you work your way up the career ladder toward reaching your goal of becoming the chief executive officer (CEO) of the hospital.
Due to scarce resources, your organization is faced with the decision of choosing between mutually exclusive projects (I.e., Build a Rehab. Center or Build a Neonatal Wing). You have been asked to develop a financial analysis of two projects and based on Net Present Value (NPV), Return on Investment (ROI), and Profitability Index (PI), explain which project is best to implement.
Present your findings as a 3-4 pages (body) Word document formatted in APA style; Abstract, Body, Reference Page
Part 2(4-5 paragraphs)
You work for the local hospital and you and your colleagues need to decide on whether to purchase new equipment for the clinic. 
The acquisition cost is $50,000 if it is purchased. The depreciation of the equipment will be $10,000 for years 2 through 4. If the equipment is leased, it will cost $11,000 per year for 5 years. 
Instructions
In regards to owning versus leasing, which method would you recommend and why?
Explain using your understanding of capital budgeting and capital structure decisions.

David · Accepted Answer

PART-1 
As an in charge of the financial department the role in any organization becomes very important. 
The person has to assure that the company does not have to face any problems regarding the 
position and status of the company on the point of view of the finance of the enterprise. The 
manager has to assure that the enterprise is not facing any difficulty as such in the management 
of its activities by ensuring that the proper budget for each and every activity is being set up 
early and it is tried that it could be achieved so that the desired goals are achieved. As in the case 
of being a senior of the other employees it is the responsibility of the senior to set a proper 
example for the learners so that they might be able to keep up the task of the management. 
As in the given case that the organization is facing the restraint of resources that is the type of 
capital rationing for the enterprise and so that capital should be utilized in a proper manner so 
that it could help to use it resources efficiently. As it could be seen that the organization is faced 
with the decision of selecting between two projects which are mutually exclusive which means 
that only one of them could be selected? The projects which are mutually exclusive cannot be 
chosen together on the basis of their performance but the decision is to be taken based on the 
NPV of the projects that is the expected net present value of the inflows of the project. The 
decision of this financial analysis is to be taken by the analyst newly employed. There are 
various parameters through which the decisions could be taken like NPV analysis, Profitability 
Index, Internal Rate of Return that are very helpful. But for the mutually exclusive projects the 
NPV is the best option as it helps to increase the shareholder’s health and also the Normal Rate 
of Return. The financial analysis of the projects can be determined based on the various data of 
the capital budgeting that is the inflows and the outflows related to the business and the project 
which is in the case. The two projects which are in discussion can be properly analyzed on the 
data and the base of the future cash inflows and the prospective flows regarding the question.

Part 1 You have been hired in the finance department at a large, metropolitan for-profit hospital. Your duties are very important to the entire hospital in terms of financing operating costs....

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