NURS FPX 6216 Assessment 4 Preparing and Managing a Capital Budget

Name

Capella university

NURS-FPX 6216 Advanced Finance and Operations Management

Prof. Name

Date

Preparing and Managing a Capital Budget

In order to improve an organization’s infrastructure and operational skills, capital acquisition refers to the acquisition of substantial tangible assets or investments, such as real estate, machinery, or remodeling. This promotes long-term growth and efficiency gains and entails a significant financial investment (Ployhart, 2021). The hospital is renovating the nurse lounge at St. Anthony Medical Center. This project will create a better space for nurses to relax and recharge. The goal is to assess the financial and operational impact of this renovation. The assessment will look at the costs, benefits, and long-term savings. It will also evaluate how the project supports nurses’ well-being and improves patient care.

Definition of Capital Acquisition

The hospital plans to renovate the nurse lounge at St. Anthony Medical Center. This project will make the lounge more comfortable and useful for nurses. Enough resources help nurses relax, reduce stress, and improve the care they give to patients (Ployhart, 2021). Right now, the lounge has old furniture, not enough seating, and lacks important features. The renovation will include new, comfortable chairs, more nurse space, and useful additions like coffee stations, snack dispensers, and quiet areas. The lounge will have calming colors, better lighting, and soundproofing to create a peaceful space.

There will also be phone charging stations, personal lockers, and better air circulation. The project will take about six months. The first two months will focus on planning and choosing materials. The next three months will be for construction, and the last month will include final checks and small fixes. The goal is to support nurses so they feel happier at work, experience less burnout, and provide better care. This investment will benefit both nurses and patients. First, I will create a detailed plan, set a budget, and get approval from hospital leaders. I will work with architects, contractors, and suppliers to choose materials and designs. I will access hospital funds, grants, and possible donations to cover costs. Collaboration with executives, nurse managers, and staff will ensure the lounge meets nurses’ needs. I assume the project will stay on schedule and within budget, with minimal disruption to hospital operations.

Justification of the Need for Capital Acquisition

Renovating the nurse lounge at St. Anthony Medical Center is an important investment. It supports the hospital’s goal of providing great patient care and caring for the nurses (St. Anthony Medical Center, n.d). Nursing is a tough job, both physically and emotionally. A good lounge allows nurses to rest, recharge, and relieve stress. A better lounge means happier nurses, less burnout, and fewer nurses leaving their jobs. When nurses feel good, they give better care to patients. Spending money on nurses’ well-being helps the hospital in many ways. A positive work environment keeps nurses from calling out sick or quitting.

This saves money because hiring and training new staff is expensive. A relaxing break space also helps nurses stay focused, reducing mistakes and keeping patients safer. Some might think the hospital should spend money on new medical equipment or bigger treatment areas. But Roth et al. (2022) show that patient care improves when nurses are happy and healthy. If the hospital can show that this renovation will help keep nurses and prevent mistakes, leaders are more likely to support it. This project is not just about comfort; it is about making the hospital a better place for both nurses and patients.

Preparing a Capital Budget

When preparing a capital budget, it is essential to consider the necessary assets required for the project. These assets should align with the overall purpose and functionality of the space while ensuring efficiency and sustainability. The careful selection of these items contributes to the project’s long-term success. Budgeting for these assets requires evaluating their cost-effectiveness, durability, and compatibility with the intended space. Additionally, ensuring that the selected assets meet safety and regulatory standards is a key consideration (Serrano, 2023). Properly allocating financial resources toward these assets can enhance the overall value and usability of the project. A well-planned approach to asset acquisition helps maintain financial stability while achieving the desired outcomes.

Item	Quantity	Costs (USD)
Lounge Furniture (Chairs, Sofas, Tables)	10 sets	$25,000
Lockers for Personal Storage	20 units	$10,000
Kitchenette (Microwave, Refrigerator, Coffee Maker)	1 set	$8,500
Flooring Replacement	1,000 sq. ft.	$15,000
Wall Paint & Aesthetic Enhancements	2,000 sq. ft.	$7,500
Lighting Fixtures (LED, Ambient)	15 units	$5,000
HVAC System Upgrade	1 unit	$12,000
Noise Reduction Panels	500 sq. ft.	$6,500
Smart TV & Entertainment System	2 units	$4,500
Wi-Fi & Charging Stations	5 stations	$3,500
Contingency Fund (10% of Total)	N/A	$9,500
Total Capital Cost	N/A	$107,000

NURS FPX 6216 Assessment 4 Preparing and Managing a Capital Budget

The budgeting process involves planning and executing several activities that contribute to the successful completion of the project. These activities typically include preparation, implementation, and finalization phases to ensure a smooth workflow. Proper planning helps avoid delays, manage costs, and address potential challenges. Each activity must be carefully scheduled and coordinated to optimize efficiency and resource utilization (Nunden et al., 2022). Regular monitoring and adjustments throughout the process help maintain alignment with the budget and project goals. Effective management of these activities ensures a seamless transition from planning to execution, resulting in a well-structured and functional outcome.

Activity	Costs (USD)
Contractor & Labor Fees	$20,000
Design & Consulting Fees	$7,000
Permits & Compliance Fees	$3,500
Cleaning & Post-Renovation Setup	$2,500
Total Activities Cost	$33,000

Category	Cost (USD)
Assets	$107,000
Activities	$33,000
Grand Total	$140,000

NURS FPX 6216 Assessment 4 Preparing and Managing a Capital Budget

Several factors may introduce uncertainties into the budgeting process, requiring careful consideration and contingency planning. Unpredictable variables such as external influences, compliance requirements, and unforeseen challenges can impact financial planning. Knowledge gaps may arise in cost estimation, resource allocation, and regulatory compliance (Serrano, 2023). Addressing these gaps through thorough research, expert consultation, and risk assessment can help improve budgeting accuracy. Preparing for potential uncertainties ensures flexibility and the ability to make necessary adjustments without compromising project goals (Nunden et al., 2022). Effective financial planning and strategic decision-making help navigate these uncertainties and maintain the project’s viability.

Process of Cost Calculations

Calculating costs for a capital acquisition project involves several steps to ensure accuracy and financial feasibility. The process begins with identifying all necessary components, including materials, labor, permits, and contingency funds. Each cost category is then researched using reliable sources such as vendor quotes, market price comparisons, and past project expenditures (Ployhart, 2021). Additionally, input from financial analysts, procurement teams, and facility managers is essential to validate cost estimates and ensure compliance with budget constraints.

Primary sources of cost information include vendor price lists, contractor estimates, and industry benchmarks. It is crucial to verify that cost data is current and reflects market fluctuations to prevent underestimations or budget shortfalls. Any outdated or questionable data points require further validation through additional quotes or expert consultation. Discrepancies in cost calculations can arise due to price variations, labor shortages, or unforeseen expenses (Xie et al., 2022). The budget includes cost buffers and contingency funds to address these uncertainties. Regular cost reviews throughout the project timeline help mitigate financial risks and ensure alignment with available resources.

Budget Management Plan

A structured budget management plan is essential for ensuring the successful execution of the proposed capital acquisition while maintaining financial accountability. The plan involves close collaboration with financial and administrative staff, including budget committees, procurement specialists, and department managers. These individuals provide oversight, validate cost estimates, and ensure expenditures align with the allocated budget (Nunden et al., 2022).

Regular meetings will be scheduled to review financial reports, track spending, and address potential budgetary concerns proactively. Cost control methods will include competitive bidding for vendor contracts, bulk purchasing to secure discounts, and stringent expenditure approval processes. Each project phase will have predefined spending limits, and any additional costs will require justification and approval from financial stakeholders.

Additionally, real-time budget tracking tools like You Need a Budget (YNAB) will monitor expenses, ensuring that spending remains within the allocated limits (Agarwal & Ann, 2024). Managing budget variances involves identifying discrepancies early and adjusting expenditures accordingly. If costs exceed projections, reallocating funds from non-essential areas or utilizing contingency reserves will help mitigate financial overruns. Regular financial reviews and transparent reporting ensure that budgetary adjustments align with project goals while maintaining fiscal responsibility.

The Impact of Capital Acquisition on the Financial Health of the Hospital

The capital acquisition for renovating the nurse lounge will have short-term and long-term financial implications for the organization. In the short term, the hospital will incur a significant expense to cover construction, furniture, and amenities. However, the long-term benefits, such as improved nurse satisfaction, reduced burnout, and lower turnover rates, are expected to yield a positive return on investment (ROI). According to Roth et al., (2022), well-rested and engaged nursing staff can lead to better patient care, fewer medical errors, and improved operational efficiency, ultimately reducing staff shortages and recruitment costs.

The estimated timeline for cost recovery will depend on factors such as increased staff retention and decreased absenteeism, which contribute to financial savings. While some cost benefits may be realized within the first few years, full recovery could take longer, depending on operational efficiencies and workforce stability (Xie et al., 2022). Depreciation must also be considered, as furniture and fixtures will lose value over time. To address this, regular maintenance and upgrades will be planned to extend the lounge’s usability. Areas of uncertainty include fluctuating material costs and potential delays, requiring careful financial planning and contingency measures.

Conclusion

Renovating the nurse lounge is a smart investment. It will help nurses feel better, work better, and stay longer. Happier nurses mean better care for patients and fewer mistakes. The project costs money now, but it will save money in the future. This change will make the hospital a better place for everyone.

References

Agarwal, S., & Ann, T. C. (2024). Personal finance applications of fintech. Emerald Publishing Limited EBooks, 235–248. https://doi.org/10.1108/978-1-83753-608-520241029

Nunden, N., Abbana, S., Marimuthu, F., & Sentoo, N. (2022). An assessment of management skills on capital budgeting planning and practices: Evidence from the small and medium enterprise sector. Cogent Business & Management, 9(1). https://doi.org/10.1080/23311975.2022.2136481

Ployhart, R. E. (2021). Resources for what? Understanding performance in the resource-based view and strategic human capital resource literatures. Journal of Management, 47(7), 014920632110031. https://doi.org/10.1177/01492063211003137