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READ:  Capital Budgeting in Health Organizations: Application of the Multicriteria Method Promethee V1Capital Budgeting, and Strategic Capital Planning: System Looks Toward the Future, and Overview of Capital Budgeting (Links to an external site.) articles, as well as the Capital Budgeting (Links to an external site.) web page.

BACKGROUND: The most obvious cost in a capital budget is the actual cost of the capital expenditure item. We must also consider other costs that will be incurred when we make the capital expenditure (purchase). These costs are important to include because they can be the difference between a successful implementation of the capital expenditure item and staying on budget.

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·  After reading the links above provide an example of a healthcare capital expenditure.

·  Explain the rationale behind the purpose of a capital expenditure budget.

·  Provide two other cost considerations and explain their inclusion in your capital budget plan.

Example: if you are installing an Electronic Medical Records (EMR), you must include future cost for maintenance, software updates, new computers, etc. These are the hidden costs of operation often not considered in a capital budget.

DUE Jan 15, 20 @10 am Eastern Time