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NURS FPX 6216 Assessment 4 Preparing and Managing a Capital Budget

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    NURS FPX 6216 Assessment 4 Preparing and Managing a Capital Budget

    Student Name

    Capella University

    NURS-FPX 6216 Advanced Finance and Operations Management

    Prof. Name

    Date

    Preparing and Managing a Capital Budget

    The present evaluation focuses on a 50-bed facility grappling with nursing turnover attributed to a demoralizing workplace and low staff satisfaction. The strategy involves addressing these challenges by formulating a budget for staff training and renovating their lounge. This plan encompasses capital purchases, budget management, and justifications. In my role as a nurse leader, my goal is to establish a nurses’ lounge to rejuvenate and motivate the staff. The objective is to create a capital budget to analyze available resources and achieve optimal outcomes.

    Capital Acquisition and Assumptions

    Capital budgeting is pivotal for organizations when planning and evaluating resource allocation decisions among different projects. These one-time investments are geared towards long-term sustainability, ensuring well-managed and carefully considered resource allocation (Bosch-Badia et al., 2020). In smaller facilities, care depends on productivity and staff morale. Positioned as a step-down facility between the intensive care unit and general surgery floor, the innovation aspires to be state-of-the-art. This involves creating a lounge where nurses in a high-pressure environment can relax and easily access resources.

    The renovation aims to transform the gloomy working environment contributing to nurse turnover. Research indicates that a positive working environment boosts nurse motivation, fostering connectivity, a sense of value, and improved facilities. These factors result in reduced medical errors, enhanced patient care, and fewer readmissions (Maassen et al., 2021). The plan involves giving the lounge a new look and enhancing staff comfort with features like comforters, convertible medicated furniture, lockers, vending machines, and water dispensers. Hygienic products will be utilized to ensure the well-being of the nurses, with the project expected to take eight months. The assumption is that providing a comfortable space and attending to nurses’ needs will elevate satisfaction levels, ultimately enhancing the quality of healthcare provided to patients.

    Justification for the Capital Acquisition

    Research underscores the significance of nurses’ motivation in ensuring quality healthcare and staff retention (Karaferis et al., 2022). Renovating the facility to foster a sense of belonging for the nurses is a crucial responsibility of the nurse leader. The renovations aim to benefit nurses by introducing staff-centered changes that enhance their comfort and promote positive interactions. A positive working environment has been linked to increased staff productivity, enabling them to perform at their best and improve overall organizational outcomes (Zhenjing et al., 2022).

    This change is anticipated to boost nurses’ productivity, instill a greater sense of responsibility for patient care, and align their practices with the organization’s goals. Ensuring the emotional, physical, and psychological well-being of nurses is essential for effective patient support and care (Pedrosa et al., 2020). Thus, the lounge renovations are an effort to meet the diverse needs of the nursing staff.

    Employee satisfaction positively impacts care quality, aligning with the organization’s mission of providing patient-centered care. Creating a lounge offers a space for relaxation, fostering a sense of value among staff, and promoting a positive and collaborative working environment. Executives are expected to view this budget positively, given its potential to reduce turnover and enhance patient outcomes and satisfaction.

    Alternatives, such as performance reviews and incentives, primarily address external motivation. However, as reported by nurses, the root cause of job dissatisfaction is the depressing environment. Therefore, a holistic approach targeting both intrinsic and extrinsic motivations is deemed more effective in ensuring long-term staff retention.

    Preparing a Capital Budget

    The implementation of the current budget is scheduled over the next eight months. The budget preparation begins with data collection, including interviews and surveys to identify the needs of the nurses. The assumption is that the budget aims to provide a supportive, less stressful, and positive environment to enhance nurses’ comfort and motivation. The budget details, as provided in Table 1 (see Appendix 1), involve some uncertainties related to leadership, workload, and maintenance costs that may impact the budgeting process.

    Process of Calculating Cost

    Cost calculation involves data collection from various vendors and market surveys to understand current prices. Vendor quotes are obtained for suggested changes, and the most suitable vendor quotation is selected by the CFO and CEO. The cost calculation process utilizes the payback period (PP) method, estimating the number of years needed to recover the initial investment (Mollah et al., 2021). The finance team is responsible for these calculations, allowing the organization to compare results based on revenue.

    The estimated payback period in this assessment is one year, considering retention, hiring, and training savings. It is crucial to note that this timeline is post-implementation. Data for the last annual budget is collected from finance department sources, stakeholders, and external sources. Executives, the finance head, and administration analyze the data, make cost assumptions, and allocate implementation years with assistance from the accounts department.

    Budget Management Plan

    The budget management plan emphasizes inter-professional collaboration for effective execution. Positive inter-professional collaboration significantly influences healthcare project execution (Schmidt et al., 2021). In this budgeting process, collaboration is planned with the finance director, head of accounting, and administration director for gathering historical trends, budget approval, and initiating the process. Collaboration with an outsourced vendor is essential for construction, with oversight from the administration director. The IT department head ensures technology support, and the maintenance team collaborates for upkeep.

    Budget management assumes that proper planning, expense monitoring, and deadline management are crucial for evaluating work efficacy. Cost reduction methods will be employed for cost control, including identification and execution of measures to minimize costs while maintaining status quo. Identifying, analyzing, and correcting budget variances, such as reducing expenses or adjusting the change strategy, are crucial for effective cost control.

    Impact of Capital Acquisition on Financial Health

    Initially, the renovation may strain the organization financially, incurring immediate expenses and impacting cash flow while reducing short-term liquidity. However, it offers a long-term return on investment by aiming to reduce turnover, subsequently cutting costs associated with hiring and training. These cost savings can be redirected to increase wages and provide staff benefits, further reducing turnover and enhancing productivity (Awosoga et al., 2023).

    Moreover, it contributes to better financial stability, enabling the organization to compete with market trends. The budget estimates a 50% return on investment within the first six to eight months, recovering renovation costs. However, depreciation values, asset descriptions, replacement or maintenance costs, and tax implications require analysis for effective financial budgeting and informed decision-making.

    References

    Awosoga, O. A., Odole, A. C., Onyeso, O. K., Ojo, J. O., Ekediegwu, E. C., Nwosu, I. B., Nord, C., Steinke, C., Varsanyi, S., & Doan, J. (2023). Perceived strategies for reducing staff-turnover and improving well-being and retention among professional caregivers in Alberta’s continuing-care facilities: A qualitative study. Home Health Care Services Quarterly, 42(3), 193–215. https://doi.org/10.1080/01621424.2023.2166889

    Bosch-Badia, M.-T., Montllor-Serrats, J., & Tarrazon-Rodon, M.-A. (2020). The capital budgeting of corporate social responsibility. Sustainability, 12(9), 3542. https://doi.org/10.3390/su12093542

    NURS FPX 6216 Assessment 4 Preparing and Managing a Capital Budget

    Dash, S., Shakyawar, S. K., Sharma, M., & Kaushik, S. (2019). Big data in healthcare: Management, analysis and future prospects. Journal of Big Data, 6(1), 54. https://doi.org/10.1186/s40537-019-0217-0

    Karaferis, D., Aletras, V., Raikou, M., & Niakas, D. (2022). Factors influencing motivation and work engagement of healthcare professionals. Materia Socio-Medica, 34(3), 216–224. https://doi.org/10.5455/msm.2022.34.216-224

    Maassen, S. M., van Oostveen, C., Vermeulen, H., & Weggelaar, A. M. (2021). Defining a positive work environment for hospital healthcare professionals: A Delphi study. PLoS ONE, 16(2), e0247530. https://doi.org/10.1371/journal.pone.0247530

    NURS FPX 6216 Assessment 4 Preparing and Managing a Capital Budget

    Mollah, A. S., Rouf, A., & Rana, S. M. S. (2021). A study on capital budgeting practices of some selected companies in Bangladesh. PSU Research Review, 7(2), 137–151. https://doi.org/10.1108/PRR-10-2020-0035

    Pedrosa, A. L., Bitencourt, L., Fróes, A. C. F., Cazumbá, M. L. B., Campos, R. G. B., de Brito, S. B. C. S., & Simões e Silva, A. C. (2020). Emotional, behavioral, and psychological impact of the covid-19 pandemic. Frontiers in Psychology, 11. https://www.frontiersin.org/articles/10.3389/fpsyg.2020.566212

    Schmidt, J., Gambashidze, N., Manser, T., Güß, T., Klatthaar, M., Neugebauer, F., & Hammer, A. (2021). Does interprofessional team-training affect nurses’ and physicians’ perceptions of safety culture and communication practices? Results of a pre-post survey study. BMC Health Services Research, 21(1), 341. https://doi.org/10.1186/s12913-021-06137-5

    Zhenjing, G., Chupradit, S., Ku, K. Y., Nassani, A. A., & Haffar, M. (2022). Impact of employees’ workplace environment on employees’ performance: A multi-mediation model. Frontiers in Public Health, 10, 890400. https://doi.org/10.3389/fpubh.2022.8

    Appendix

    Table 1a: Showing the Expense category and the Amount Required for the Expense.

    CategoriesAmount required ($)
    Expenses of construction (lockers, bathrooms, and cupboards/shelves)400,000
    Infrastructural changes (Couches, Table, chairs, bookshelves, mats, etc.)200,000
    Labor expense175,000
    IT development expense (installation of biometrics, desktops, and other machinery.)250,000
    Maintenance charges (AC, water dispenser, and vending machine maintenance)90,000
    Hygiene management charges (dispensers, sanitizers, scrubs, soaps, etc.)50,000
    Miscellaneous60,000
    Total1,225,000