What are the objectives of capital investment decisions?

INVESTMENT DECISIONS

Three main objectives:

1. Financial return
2. Non financial benefit
3. Future funding

CAPITAL INVESTMENT DECISIONS

Decisions in making investments takes place in two steps that is, determining if an investment worth the capital and once this is done, the next step will be to decide how to finance the investment. Capital investment decisions come in three forms; strategic, replacement and expansion decisions. These decisions are made to achieve three very specific objectives:

Financial return - Financial benefit is of concern to many healthcare organizations and is required for the daily operations of any organizations. This applies to non profit organizations as much as it does to the for profit organizations.

Non financial benefits - This applies to other benefits of investment that support the organization's survival. The sole focus here is the employees, patients, community at large and the mission of the organization.

Future funding - this is meant to fund the future endeavors of the organization such as medical research, unprofitable services and expand to offer new services.