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 $50000 if it is purchased. The depreciation of the equipment will be $10000 for years 2 through 4. If the equipment is leased it will cost $11000 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.