Economics Homework Help

Budget Development

Overview

If your organization makes frequent business transactions, one of the tasks you face as a manager is budget preparation. A budget is a tool used for planning and controlling financial resources. It guides your future plan of action in financial terms within a set period of time. A budget does not have to be complex; however, it should support the organization’s strategic plan. We will need resources to achieve our goals and objectives.For this assignment, you will focus on the operating budget. An operating budget shows the company’s projected revenue and associated expenses for an upcoming period—usually the next year. An operating budget starts with revenue and then shows each expense type. This includes variable costs—or the costs that vary with sales—such as the cost of raw materials and production labor. The operating budget includes fixed costs, such as the monthly rent on office space or the monthly payment for a photocopier lease. The budget also includes operating expenses, such as interest on business loans, and the noncash expense of depreciation. These items enable the company to compute its projected net income and net profit percentage.

Instructions

Imagine you are the health care administrator for a nonprofit clinic, home health agency, or outpatient surgery center. Your first task is to locate the strategic plan for that organization or determine its strategic direction through the vision statement, mission or purpose statement, and strategic priorities or goals. You will also need the audited financial statements for the organization.Using the information from your research, develop a one-year operating budget for the chosen entity, which will include operating revenues and expenses. Include a 1–2 page document to justify the approach you use in constructing the operating budget with the strategic plan or strategic direction.

• Upload the strategic plan or strategic direction and audited financial statements as an attachment or include the Web link.
• Complete your operating budget using Excel.
• Support your work with at least three quality references, one being your course textbook. These should be cited per the Strayer Writing Standards.

This course requires the use of Strayer Writing Standards. For assistance and information, please refer to the Strayer Writing Standards link in the left-hand menu of your course. Check with your professor for any additional instructions.The specific course learning outcome associated with this assignment is:

• Develop a budget for a department within a healthcare organization.

EXTRA CREDIT !!! EXTRA CREDIT !!Please complete the extra credit correctly !You’re a member of the financial services department at Benson Regional Medical Center. The chief financial officer and chair of the capital budgeting committee, Dana Foster, has requested that you perform some capital analysis of two proposed patient service programs.

1. Start by downloading the Week 8 Discussion Spreadsheet [XLSX].
2. Use the spreadsheet to find the information needed to complete a net present value (NPV), internal rate of return (IRR), and a discounted payback period for proposed programs A and B.
3. Once you have completed the capital budgeting analyses, prepare a narrated PowerPoint presentation that provides:
   • A brief description of proposed programs A and B.
   • The cash flows projections for each option from Year 0 through Year 5.
   • The results and interpretation of the discounted payback period.
   • Net present value (NPV).
   • Internal rate of return (IRR).
   • Your program recommendation along with supporting rationale to the full capital budgeting committee for their consideration.
4. The presentation should be limited to 10 minutes.

For this discussion:

• Post the spreadsheet and slide deck.
• Remember to respond to at least one of your classmates’ posts.

Required Resources

The Payback Period in Microsoft Excel video walks you through computing a payback period in Microsoft Excel for a proposed capital investment.The Solution 6: Choose a Project Based on NPV, IRR, and Payback Period video walks you through choosing a project based on NPV, IRR, and payback period.