Question.2586 - For a health care organization to survive and grow, it requires capital. Effective capital management is vital for the business to function, especially in health care sectors that exist with such narrow profit margins. Your business operations skill is important to be able to identify risks associated with various financing options for capital projects that fund growth, purchase equipment, and build new facilities.Preparing for the Assignment Create this assignment using Microsoft PowerPoint . Assignment Directions Create a 12- to 15-slide presentation with detailed speaker notes in which you: • Evaluate effective working capital-management techniques. • Evaluate alternative capital projects. • Analyze risks associated with capital projects. • Describe the decision-making factors in lease versus buy. • Describe the effect of financing strategies on the cost of capital. • Describe the benefits and risks of debt financing. Incorporate appropriate use of images or other multimedia in your presentation. Cite any sources, images, and multimedia included in your presentation. Format your references according to APA guidelines. Submit your assignment. Resources • Center for Writing Excellence (https://multimedia.phoenix.edu/cms/cwe/) • Reference and Citation Generator (https://multimedia.phoenix.edu/cms/citation) • Grammar Assistance (https://multimedia.phoenix.edu/cms/202010168/)
Answer Below:
Slide x Effective xxxxxxx Management xxxxxxxxx capital xxxxxxxxxx involves xxxxxxxx a xxxxxxx amp x financial xxxxxxxxx in x way xxxx maximizes xxxxxxx and xxxxxxx financial xxxxxxxxx This xxx include xxxxxxx strategies xxxx as xxxxxxxxxx cash xxxx reducing xxxxx managing xxxx and xxxxxxxxx wisely xxx important xxxxxx of xxxxxxxxx capital xxxxxxxxxx is xxxx flow xxxxxxxxxx This xxxxxxxx forecasting xxx monitoring xxxx flows xx ensure xxxx the xxxxxxx has xxxxxx liquidity xx cover xxx expenses xxx investments xx also xxxxxxxx managing xxxxxxx capital xxxxx refers xx the xxxxxxx amp x current xxxxxx minus xxx current xxxxxxxxxxx By xxxxxxxx working xxxxxxx effectively xxxxxxxxx can xxxxxxxx their xxxx flow xxx reduce xxx need xxx outside xxxxxxxxx Another xxxxxxxxx aspect xx effective xxxxxxx management xx cost xxxxxxxxxx This xxxxxxxx identifying xxxxx where xxx company xxx reduce xxxxx without xxxxxxxxxxx quality xx productivity xxxx management xxx involve xxxxxxxxxxx with xxxxxxxxx to xxx better xxxxxx improving xxxxxxxxxxx efficiency xxx reducing xxxxxxxx expenses xxxxxxx effective xxxxxxx management xxxxxxxx careful xxxxxxxx analysis xxx execution xx ensure xxxx a xxxxxxx amp x financial xxxxxxxxx are xxxxx used xx their xxxxxxx potential xxxxx -Evaluate xxxxxxxxx working xxxxxxxxxxxxxxxxxx techniques x effective xxxxxxx capital xxxxxxxxxx techniques xxxxxxx managing xxxxxxxxx cash xxxx and xxxxxx term xxxxxx and xxxxxxxxxxx in x way xxxx maximizes xxxxxxxxxxxxx and xxxxxxxxx stability xxxx key xxxxxxxxxx for xxxxxxxxx working xxxxxxx management xxxxxxx Cash xxxx monitoring xxx forecasting xxxxxxxxx need xx monitor xxxxx cash xxxxxxx and xxxxxxxx carefully xx ensure xxxx they xxxx enough xxxxxxxxx to xxxxx their xxxxxxxxxx expenses xxx investments xx forecasting xxxxx cash xxxxx companies xxx anticipate xxxxxxxxx shortfalls xxx take xxxxx to xxxxxxx them xxxxxx they xxxxxx critical xxxxxxxxx management xxxxxxxx inventory xxxxxx is xxxxxxx for xxxxxxxxx working xxxxxxx management xxxxxxxxx need xx balance xxx costs xx carrying xxxxxx inventory xxxxxxx the xxxxx of xxxxx outs xxx lost xxxxx By xxxxxxxxxx inventory xxxxxx using xxxxxxxxxx such xx just-in- xxxx inventory xxxxxxxxxx companies xxx reduce xxxxxxxxx costs xxxxx still xxxxxxxx that xxxx have xxxxxx inventory xx meet xxxxxxxx demand xxxxxxxx receivable xxxxxxxxxx Companies xxxx to xxxxxx their xxxxxxxx receivable xxxxxxxxxxx to xxxxx cash xxxx problems xxxxxx by xxxx payments xx bad xxxxx This xxx involve xxxxxxx clear xxxxxxx terms xxxxxxxx incentives xxx early xxxxxxx and xxxxx credit xxxxxxx to xxxxxx the xxxxxxxxxxxxxxxx of xxxxxxxxx Accounts xxxxxxx management xxxxxxxx accounts xxxxxxx is xxxx important xxx effective xxxxxxx capital xxxxxxxxxx Companies xxxx to xxxxxxxxx favorable xxxxxxx terms xxxx suppliers xx optimize xxxxx cash xxxx while xxxx maintaining xxxx relationships xxxx suppliers xxxxx - xxxxxxxx alternative xxxxxxx projects xxxxxxxxxx alternative xxxxxxx projects xxxxxxxx assessing xxx potential xxxxx and xxxxxxx of xxxxxxxxx investment xxxxxxxxxxxxx to xxxxxxxxx which xxxx are xxxx likely xx generate xxx greatest xxxxxx on xxxxxxxxxx Some xxx factors xx consider xxxx evaluating xxxxxxxxxxx capital xxxxxxxx include xxxxxxx cost xxx total xxxx of x capital xxxxxxx is xx important xxxxxx to xxxxxxxx as xx will xxxxxx the xxxxxxx profitability xx the xxxxxxx This xxxxxxxx both xxxxxx costs xxxx as xxxxxxxxx and xxxxx as xxxx as xxxxxxxx costs xxxx as xxxxxxxxx and xxxxxxxx expenses xxxxxxx timeline xxx time xx takes xx complete x capital xxxxxxx is xxxx important xx consider xx it xxxx affect xxx cash xxxxx generated xx the xxxxxxx Longer xxxxxxxx may xxxxxxx more xxxxxxx investment xxx take xxxxxx to xxxxxxxx returns xxxxx shorter xxxxxxxx may xxxx higher xxxxxx margins xxx lower xxxxxxx returns xxxxxxxxx revenue xxx potential xxxxxxx generated xx a xxxxxxx project xxxxxx be xxxxxxxxx analyzed xx determine xxxxxxx it xx sufficient xx justify xxx investment xxxx may xxxxxxx forecasting xxxxxx for xxx product xx service xxxxxxxxx market xxxxxx and xxxxxxxxxx sales xxxxxx over xxxx Risks xxx uncertainties xxx capital xxxxxxxx involve xxxx level xx risk xxxxxxx from xxxxxxx such xx competition xxxxxxxxxx changes xx technological xxxxxxxxxxxx Evaluating xxx potential xxxxx and xxxxxxxxxxxxx associated xxxx a xxxxxxx is xxxxxxxx to xxxxxxxxxxx its xxxxxxx viability xxxxxxxxx fit xxxxxxx it xxx s xxxxxxxxx to xxxxxxxx how x capital xxxxxxx fits xxxx the xxxxxxx amp x overall xxxxxxxxx goals xxx objectives xxxxxxxx that xxxxx with xxx company xxx s xxxx competencies xxx long-term xxxxxx are xxxx likely xx generate xxxxxxxxx profitability xxx contribute xx overall xxxxxxxx success xx carefully xxxxxxxxxx these xxx other xxxxxxx companies xxx identify xxx alternative xxxxxxx projects xxxx are xxxx likely xx generate xxx greatest xxxxxxx on xxxxxxxxxx align xxxx their xxxxxxxxx goals xxx contribute xx long-term xxxxxxxx success xxxxx -Analyze xxxxx associated xxxx capital xxxxxxxx Capital xxxxxxxx can xxxxxxx various xxxxx that xxx impact xxxxx profitability xxx success xxxx of xxx most xxxxxx risks xxxxxxxxxx with xxxxxxx projects xxxxxxx Cost xxxxxxxx Capital xxxxxxxx can xx expensive xxx unexpected xxxxxxxxx in xxxxxxx costs xxx eat xxxx profits xx even xxxx to xxxxxx Factors xxxx can xxxxxxxxxx to xxxx overruns xxxxxxx delays xxxxxx changes xxx unexpected xxxxxx that xxxxx during xxxxxxxxxxxx Schedule xxxxxx Delays xx completing x capital xxxxxxx can xxxx impact xxx profitability xx they xxx cause xxxxxxx to xx delayed xx lost xxxxxxxx Delays xxx be xxxxxx by x variety xx factors xxxxxxxxx weather xxxxx shortages xxx supply xxxxx disruptions xxxxxxx issues xx a xxxxxxx project xxxx not xxxx quality xxxxxxxxx it xxx need xx be xxxxxx or xxxxxxxx which xxx be xxxxxx and xxxxxxxxxxxxxx Poor xxxxxxx can xxxx negatively xxxxxx the xxxxxxxxxx of xxx company xxx reduce xxxxxxxx satisfaction xxxxxx conditions xxxxxxx in xxxxxx conditions xxxx as xxxxxx in xxxxxx or xxxxxxxxx competition xxx impact xxx profitability xx a xxxxxxx project xxxxx -LeasingL xxxxxx is x common xxxxxx of xxxxxxxxx capital xxxxxx such xx equipment xxxxxxxx and xxxx estate xxxxx a xxxxx agreement xxx lessee xxx user xx the xxxxx makes xxxxxxx payments xx the xxxxxx the xxxxx of xxx asset xx exchange xxx the xxxxx to xxx the xxxxx for x defined xxxxxx of xxxx Overall xxxxxxx can xx a xxxxxx financing xxxxxx for xxxxxxxxx that xxxx to xxxxxxx capital xxxxxx but xxxxxx to xxxxxxxx their xxxx reserves xx maintain xxxxxxxxxxx However xx amp x important xx carefully xxxxxxxx the xxxxx and xxxxxxxx of xxxxxxx versus xxxxxxxxxx an xxxxx outright xxx to xxxxxxxxx lease xxxxx that xxxx the xxxxxxxx needs xx the xxxxxxxx Slide xxxxxxxxxxx and xxxxxxxxxxxxx of xxxxxxx Some xx the xxxxxxxxxx of xxxxxxx include xxxxx upfront xxxxx Leasing xxxxxx companies xx acquire xxxxxx with xxxxxxx upfront xxxxx as xxxx typically xxxxxxx only x small xxxx payment xx security xxxxxxx Improved xxxx flow xxxxxxx can xxxxxxx cash xxxx by xxxxxxxxx out xxx cost xx an xxxxx over xxxx rather xxxx requiring x large xxxxxxxx investment xxxxxxxxxxx Leasing xxxxxxxxxx can xx structured xx meet xxx specific xxxxx of xxx lessee xxxx options xxx varying xxxxx terms xxx end-of-lease xxxxxxx Tax xxxxxxxx Depending xx the xxxxxxxxx of xxx lease xxxxxxxxx lease xxxxxxxx may xx tax- xxxxxxxxxx as xx operating xxxxxxx Reduced xxxx Leasing xxx reduce xxx risk xx asset xxxxxxxxxxxx as xxx lessee xxx upgrade xx newer xxxxxxxxx at xxx end xx the xxxxx term xxxxxxx having xx bear xxx full xxxx of xxxxxxxxxxx However xxxxx are xxxx some xxxxxxxxx drawbacks xx leasing xxxxxxxxx Higher xxxxxxx costs xxxx the xxxx term xxxxxxx can xx more xxxxxxxxx than xxxxxxxxxx an xxxxx outright xx the xxxxxx will xxxxxxxx to xxxx lease xxxxxxxx for xxx duration xx the xxxxx term xxxxxxx control xxxxxxx the xxxxxx retains xxxxxxxxx of xxx asset xxx lessee xxx have xxxxxxx control xxxx how xx is xxxx and xxxxxxxxxx Restrictions xx use xxxxx agreements xxx contain xxxxxxxxxxxx on xxx the xxxxx can xx used xx modified xxxxx could xxxxx the xxxxxx amp x flexibility xxxxxxxxxxxx obligations xx the xxx of xxx lease xxxx the xxxxxx may xx required xx return xxx asset xx good xxxxxxxxx and xxx any xxxxxxxxx fees xx penalties xxxxxxxxx in xxx lease xxxxxxxxx Slide x Describe xxx decision-making xxxxxxx in xxxxx versus xxx When xxxxxxxx whether xx lease xx buy xx asset xxxxxxxxx must xxxxxxxx a xxxxxxx of xxxxxxx to xxxxxxxxx which xxxxxx is xxxx beneficial xxxx key xxxxxxxxxxxxxxx factors xxxxxxx Upfront xxxxx Purchasing xx asset xxxxxxxx typically xxxxxxxx a xxxxxx upfront xxxxxxxxxx than xxxxxxx which xxx impact xxxx flow xxx the xxxxxxx to xxxxxx other xxxxxxxxxx opportunities xxxxxxxxx costs xxxx the xxxx term xxxxxxx can xx more xxxxxxxxx than xxxxxxxxxx an xxxxx outright xxx to xxxxxxx lease xxxxxxxx while xxxxxx an xxxxx outright xxx require xxxxxxxxxx expenses xxxx as xxxxxxxxxxx and xxxxxx costs xxxxx lifespan xxx expected xxxxxxxx of xxx asset xxx also xxxxxx the xxxxxxxx to xxxxx or xxx If xxx asset xx likely xx become xxxxxxxx or xxxxxxx replacement xx the xxxx future xxxxxxx may xx a xxxx cost-effective xxxxxx Flexibility xxxxxxx can xxxxx more xxxxxxxxxxx in xxxxx of xxxxxxxxx to xxxxx assets xx the xxx of xxx lease xxxx while xxxxxx an xxxxx outright xxxxxxxx more xxxxxxx over xxx the xxxxx is xxxx and xxxxxxxxxx Tax xxxxxxxxxxxx The xxx implications xx leasing xxxxxx buying xx asset xxxxxx also xx considered xxxxxxxxx potential xxx deductions xxx leasing xxxxxxxx Creditworthiness xxxxxxx may xx a xxxx attractive xxxxxx for xxxxxxxxx with xxxxxxx creditworthiness xx who xxx unable xx secure xxxxxxxxx for x large xxxxxxxx purchase xxxxxxxxxxx cost xxxxxxxxx must xxxx consider xxx opportunity xxxx of xxxxxxx versus xxxxxx an xxxxx including xxx potential xxxxxxx on xxxxxxxxxx that xxxxx be xxxxxxxx by xxxxx the xxxxx for xxxxx purposes xxxxxxxxxx the xxxxxxxx to xxxxx or xxx an xxxxx will xxxxxx on xxx specific xxxxx and xxxxxxxxxxxxx of xxx company xx carefully xxxxxxxxxxx these xxx other xxxxxxx companies xxx make xxxxxxxx decisions xxx choose xxx financing xxxxxx that xxxx aligns xxxx their xxxxxxxx goals xxx financial xxxxxxxxxx Slide x Cost xx Capital xxx cost xx capital xx the xxxx of xxxxxx that x company xxxx earn xx its xxxxxxxxxxx to xxxxxxx its xxxxxxxxx and xxxxxxxx their xxxxxxxxxx in xxx business xx represents xxx minimum xxxxxx of xxxxxx that x company xxxx achieve xx its xxxxxxxxxx projects xx justify xxx use xx its xxxxx The xxxx of xxxxxxx is xxxxxxxxx calculated xx a xxxxxxxx average xx the xxxx of xxxx and xxx cost xx equity xxx cost xx debt xxxxxx to xxx interest xxxx that x company xxxx on xxx outstanding xxxx while xxx cost xx equity xxxxxxxx the xxxxxxxx rate xx return xxxx investors xxxxxx on xxxxx investment xx the xxxxxxx amp x stock xx calculate xxx weighted xxxxxxx cost xx capital xxxx companies xxxx first xxxxxxxxx the xxxxxxxxxx of xxxxx capital xxxxxxxxx that xxxxxxxx of xxxx and xxxxxx They xxx then xxxxxxxxx the xxxx of xxxx component xx analyzing xxx interest xxxxx or xxxxxxxxx paid xx investors xxx the xxxx associated xxxx each xxxxxxxxx Finally xxx weighted xxxxxxx cost xx capital xx calculated xx multiplying xxx cost xx each xxxxxxxxx by xxx proportional xxxxxx in xxx capital xxxxxxxxx The xxxx of xxxxxxx is xx important xxxxxx for xxxxxxxxxx as xx helps xxxxx investment xxxxxxxxx and xxxxxxx that xxxxxxxxx are xxxxxxx sufficient xxxxxxx on xxxxx invested xxxxxxx If x company xxx s xxxx of xxxxxxx is xxxxxx than xxx expected xxxxxx on xx investment xxxxxxx it xxx not xx a xxxx use xx the xxxxxxx amp x resources xx it xxxx fail xx generate xxxxxxxxxx returns xx justify xxx investment xxxxxxxxxx if x company xxx s xxxx of xxxxxxx is xxxxx than xxx expected xxxxxx on xx investment xxxxxxx it xxx be x good xxxxxxxxxx opportunity xx it xxx the xxxxxxxxx to xxxxxxxx a xxxxxxx return xx investment xxxxx - xxxxxxxx the xxxxxx of xxxxxxxxx strategies xx the xxxx of xxxxxxx Financing xxxxxxxxxx can xxxx a xxxxxxxxxxx impact xx a xxxxxxx amp x cost xx capital xx changing xxx mix xx debt xxx equity xx the xxxxxxx amp x capital xxxxxxxxx companies xxx influence xxxxx overall xxxx of xxxxxxx and xxx returns xxxxxxxx by xxxxxxxxx Some xxxx in xxxxx financing xxxxxxxxxx can xxxxxx the xxxx of xxxxxxx include xxxxxxxxxx or xxxxxxxxxx the xxxxxxxxxx of xxxx Debt xx generally xxxx expensive xxxx equity xxxxxxx interest xxxxxxxx on xxxx are xxxxxxxxxxxxxx and xxxxxxx demand x lower xxxx of xxxxxx than xxxxxx investors xxxxxxx increasing xxx proportion xx debt xx the xxxxxxx structure xxxx increases xxxxxxxxx risk xxx thus xxx increase xxx company xxx s xxxx of xxxxxxx On xxx other xxxx decreasing xxx proportion xx debt xxx lower xxxxxxxxx risk xxx increase xxx cost xx equity xxxx raising xxx overall xxxx of xxxxxxx Changing xxx level xx leverage xxxxxxxxx can xxxx alter xxxxx level xx leverage xxxxx refers xx the xxxxxx of xxxx used xx finance xxxxx operations xxxxxx levels xx leverage xxx generate xxxxxx returns xx equity xxx they xxxx increase xxxxxxxxx risk xxx may xxxxxxx a xxxxxx cost xx equity xxxxx levels xx leverage xxx reduce xxxxxxxxx risk xxx may xxxx reduce xxxxxxx on xxxxxx and xxxxxx in x higher xxxx of xxxxxx Issuing xxx equity xxxx a xxxxxxx issues xxx equity xx dilutes xxx ownership xxxxxxxx of xxxxxxxx shareholders xxx may xxxx to x higher xxxxxxxx rate xx return xxxx investors xxxx can xxxxxxxx the xxxx of xxxxxx and xxxxx the xxxxxxx cost xx capital xxxxx financial xxxxxxxxxxx Companies xxx also xxx financial xxxxxxxxxxx such xx convertible xxxxx or xxxxxxxx to xxxxx capital xxxxx instruments xxx offer xxxxx interest xxxxx or xxxxxxx flexibility xxx they xxx also xxxxxxxx financial xxxx and xxxxxx in x higher xxxx of xxxxxxx Overall xxxxxxxxx strategies xxx have x significant xxxxxx on x company xxx s xxxx of xxxxxxx Companies xxxx carefully xxxxxxxx the xxxxxxxxxx between xxxxxxxxx financing xxxxxxx and xxxxxxxxx the xxxxxxx mix xx debt xxx equity xx achieve xxxxx financial xxxxxxxxxx while xxxxxxxxxx their xxxxxxx cost xx capital xxxxx -Benefits xx Debt xxxxxxxxx Benefits xxxxx cost xx capital xxxx is xxxxxxxxx cheaper xxxx equity xxxxx lenders xxxxxxx lower xxxxxxx compared xx equity xxxxxxxxx This xxx help xxxxxx the xxxxxxx cost xx capital xxx increase xxx company xxx s xxxxxxxxxxxxx Interest xxxxxxxx are xxxxxxxxxxxxxx Companies xxx deduct xxxxxxxx payments xx their xxxxx which xxxxxxx their xxxxxxx income xxx can xxxxx their xxxxxxx tax xxxxxxxxx Control xxxxxxxx by xxxxxxxxxxxx Unlike xxxxxx financing xxxx financing xxxx not xxxxxx ownership xx control xx the xxxxxxx Shareholders xxxxxx full xxxxxxxxx and xxxxxxxxxxxxxxx power xxxx the xxxxxxxx Fixed xxxxxxxxx schedule xxxx financing xxxxxxxx a xxxxx repayment xxxxxxxx which xxxxx it xxxxxx for xxxxxxxxx to xxxx and xxxxxx their xxxx flow xxxxxxxxx for xxxxxxxxx leverage xxxx financing xxx enable xxxxxxxxx to xxxxxx a xxxxxxx amount xx capital xxxx they xxxxx raise xxxxxxx equity xxxxxxxxx alone xxxxx can xx useful xxx funding xxxxxxxxxxx projects xx expansions xxxxx -risk xx Debt xxxxxxxxx Risks xxxxxxxx payments xxxx be xxxx regardless xx company xxxxxxxxxxx Unlike xxxxxx financing xxxxx investors xxxxx in xxx profits xxx losses xx the xxxxxxx debt xxxxxxxxx requires xxxxxxx interest xxxxxxxx to xx made xxxxxxxxxx of xxx company xxx s xxxxxxxxx performance xxxxxxxxx financial xxxx Taking xx too xxxx debt xxx increase x company xxx s xxxxxxxxx risk xxxxxx it xxxx vulnerable xx economic xxxxxxxxx or xxxxxxx in xxxxxx conditions xxxxxxxx impact xx credit xxxxxx If x company xx unable xx make xxx debt xxxxxxxx its xxxxxx rating xxx be xxxxxxxxxx which xxx increase xxx cost xx future xxxxxxxxx Limited xxxxxxxxxxx Debt xxxxxxxxx agreements xxxxxxxxx include xxxxxxxxx that xxxxxxxx a xxxxxxx amp x ability xx undertake xxxxxxx activities xxxxx can xxxxx flexibility xxx growth xxxxxxxxxxxxx Potential xxx default xx a xxxxxxx is xxxxxx to xxxx its xxxx payments xx may xxxxxxx on xxx obligations xxxxx can xxxx to xxxxxxxxxx or xxxxxxxxxxMore Articles From Finance
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