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Financial Considerations
Financial Considerations
Lucreshia Jackson
American Sentinel College of Nursing & Health Sciences
SIM432PE
22nd September 2022
Financial Considerations
Finance is a crucial part of project management since every project needs to be planned in accordance to a budget. The aims and the project goals are met while the project sticks to its budget (Catalano, 2020). Therefore every project leader should have the budgeting skills allowing them to effectively allocate, assign, and forecast the costs in the different areas of a project, optimizing the spending (Marquis $ Huston, 2021). The managers in a project also ought to have the skills in managing profit and loss, cash flows, and balance sheet account for them to closely control and monitor the costs in the course of the project. Overspending on a budget is very easy therefore destroying the schedule of the project if the project runs out of money. Therefore, spending should be monitored for a project to finish (Catalano, 2020).
Our clinic project of introducing telemedicine as the new method of monitoring and providing healthcare to our Type 2 diabetic patients has not been left behind as it also focuses on the financial considerations of the project. In the financial analysis of this project, we have estimated that all the activities required to complete our project are $400,000. The estimated activities and their costs are;
The purchase of the telemedicine software would cost at most $300,000
The implementation will cost $30,000
The hiring of software architecture would cost around $10,000
The hiring of experts in this field to educate our medical personnel and patients on this new method would cost $30,000
Hiring a new CFO to oversee our financial; statements during the project would cost $20,000
However, this budget cost estimate is huge for our clinic, and therefore it is our duty to ensure that we are involved in activities that would reduce this budget cost. This will include reducing the budget duration from 3 months to 2 months. The budget will be managed correctly by our new CFO. Our clinic also aims to use agile management techniques during the project. We will also try and look for cheaper resources for our project. Some of our activities, such as our shareholders taking pay cuts and our outpatient activities by a margin, will reduce our expenses. The money from these activities will be used to finance our project.
However, we face some limitations in our financial activities. Our clinic cannot meet the estimated budget and can only fund up to $300,000; therefore, a deficit of 100,000 remains. Therefore, we require additional funds from loans that currently are at higher repayment interests. Also, some of our staff and stakeholders are to get pay cuts, which is a limitation since it would affect their morale during the implementation of this project. We also face higher taxes from the government, which will also affect our project budget as the amount taxable may become even more than estimated, interfering with our budget. We recently lost our finance manager, who had to quit due to medical reasons, and therefore we face a limitation of hiring a new CFO which would also cost our clinic a total of $20,000.
However, all these activities will be of benefit to our clinic. First, budgeting costs will help the project have a proper plan, preventing the clinic from running out of money as the project continues. The budget will also attract our investors, who will feel confidentiality in how we run the project. They can also raise the funding for this project, and the extra funds can be used to finance other activities that may occur during the project. With all these financial considerations, I believe that our project will be a success.
References
Catalano, T. (2020). Financial Project Plan. In Application of Project Management Principles to the Management of Pharmaceutical R&D Projects (pp. 53–54). Springer, Cham.
Read Chapter 10 in Marquis, B.L. & Huston, C.J. (2021). Leadership roles and management functions in nursing: Theory and application (10th ed.). Philadelphia, PA: Lippincott, Williams & Wilkins.
46-business_finance
Business Financing and the Capital Structure
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Debt and Equity Financing
Debt and equity financing are the most common sources of capital in business. Most businesses prefer to use both financing methods to enable reduction of downsides of the other. Debt financing is short term costs and obligations where one will retain full ownership of your business. This is mainly borrowing money from creditors. Advantages of debt financing are: It if finite and payment of debt is over time without any obligation to lender. It is also tax deductible on interest on the short term or long-term loan. Disadvantage: Money must be paid back within a fixed duration. Assets of the business can be collateral to the lender. (Jack D. Glen, Brian Pinto, 1994)
Equity financing is a long term investment and the investors hold an ownership interest in the assets. The benefit is that money is given in exchange for equity in business of stock. Advantage of Equity financing: Business owner focuses on profit making rather than loan repayment. It’s less risky than loan as there is no requirement to pay back investors thus can channel profits into expanding the business. Disadvantage: The investors will demand for ownership interest and for any decision made you will have to consult them.
An investment banker can provide leverage and help sell your business .An investment banker helps a company raise significant capital for business owner and assist in propelling a company into the next stage. In selecting an investment banker we should look at their expertise which market sector they specialize in, their experience and relationship because you are entrusting him to sell your business.
Risks and return for common stock versus corporate bonds
Investing in stocks or bonds requires you to know about the issuing entity whether corporate or government. The issuer should have a good financial performance in which one can evaluate through bond ratings and annual reports. All investors believe the higher the returns on an investment the higher the risks are. (Justin Longnecker, J Petty, Leslie Palich and Frank Hoy, 2013)
Common stocks are considered to be an equity investment; companies sell or issue stock to raise capital to fund a business. Corporate bonds are debt instruments the issuer uses to borrow money and they are issued by companies representing larger bond markets. Corporate bonds have less risk than common stock, because the price of bonds isn’t likely to increase unless interest rates fall. When company’s earnings grow the common stock will rise over time and a reduced rating will usually cause bonds price to fall. Bonds help diversify an investment portfolio and reducing the risk e.g. a blue chip bond is a very low risk investment that provides good income.
Bonds are rated based on risks but common stock carry greater risk because holders are last to be paid in case of bankruptcy. Bond holders have the lowest risk and have a stronger claim to payment than common stock holders.
Diversifying the portfolio of investments reduce the risk of a sudden unexpected outcome, this assists when a loss in one investment maybe offset by a gain in another investments. A portfolio should be spread among many different investments such as assets e.g. real estate’s or even stocks. Securities should vary in risk by picking different investments with difference in returns ensuring that large gains offset losses in other areas. Diversification reduces risk taken by an investor but it does not lower risk of underlying securities and it’s difficult to reduce risk of securities.
Reference
Justin Longnecker, J Petty, Leslie Palich and Frank Hoy (2013) Small business management
(17 ed., pp. 144-256) Cengage Learning
Jack D. Glen, Brian Pinto. (1994). Debt or equity: How firms in developing countries choose. (pp. 3-27). Washington Dc: world Bank publication.
In Baby Mode Review
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‘In Baby Mode’ Review
Motherhood is not always an easy task as many may perceive it to be. When nursing a baby, this is where the whole life of a mother changes due to the challenges that comes within the first few months into motherhood. Many will always complain to have changed their habits and routine just after giving birth to their firstborn baby. Just like in the article ‘In Baby Mode’ that I am going to give a review on, it talks about motherhood, adaptation, behaviour neurons and oxytocin. The article was written by Von Hopffgarten, Anna a biologist and editor at Gehim & Geist.
Starting with the objectives, the article had the objective of giving information on the routine of mothers that changes daily. To give information on how the brain adapts to internal adjustments. To give an illustration on how nerve cells change during pregnancy and lastly to give an indication of sensitization of women’s oxytocin.
First, the author starts by giving her own experience of motherhood. Her baby was not an easy she tells of how the first week into parenthood has many parents trying to fit in the baby mode. They try their best to ensure the baby is well fed, happy and comfortable. A baby does not grow overnight thus even though exhausted, parents will always wake up when their baby cries. It is funny how parents forget about the rigorous nights when they watch their babies sleeping in the morning. All this is due to the adaptations that the brain makes after a few weeks of giving birth. During and after pregnancy, the mother’s body is always filled with hormones that is; hormone oxytocin, estrogen and prolactin. These hormones help to stimulate lactation.
The author goes further and tells us how during pregnancy the nerve cells undergo some changes. According to research this cells grow as the pregnancy proceeds on. The development of nerves and growth of hormones is always in preparation for motherhood. The author tells us that it is the role of the mother to struggle to determine what is happening to a baby when crying; it may be hunger, fatigue, or stomach pains. We are told in the article that those women who have high oxytocin levels, tend to respond empathetically to their children. The oxytocin also helps in sensitization and making of emotions which in turn helps the mother to interact with the baby in terms of motivation and empathy. According to the author, it is all by the power of oxytocin that the mother interacts with the baby favorably. If there are low levels of oxytocin, the parent may end up depressed raising a sad or an inactive baby.
The author then gives a conclusion and a summary that after birth, the brain of the mother reorients to take care of the baby through the help of hormone oxytocin and the nerve cells. The neural nerves in the brain also get to transform structurally, that is shrinking of the grey matter in the frontal and the temporal lobes region.
The article is useful to both mothers and adults who are yet to become moms. To me I found the article useful in the sense that it gets to prepare one psychologically about motherhood that is; the experiences and how to cope with it. It is not always easy, this is what every parent needs to know in order to be in preparation and not receiving the hardships that comes with motherhood in shock. The article’s explanation on how the brain work to adapt to mother hood is very important since we all need to know the reason behind every reaction in our body. Not all of us are scientists thus the explanations help everyone in relating with her previous or future experiences.
There are somethings that the article fails to explain, we only get to know about the difficulties and how the body adapts during pregnancy. Future modifications to the article may be explaining the things that the mother finds easy to do besides the hardships of postpartum. Also, the article only gives details of how the mother adapts after pregnancy, the change of routine and the working of oxytocin. It does not tell us what happens after the period of nursing the baby that is after one year. I think this is the future things I would research on to add information besides the one provided by the article.
Conclusively, the article gives a good explanation of motherhood. I get to learn that one is not alone and the body will always adopt with the help of hormones. After a short period, one’s routine changes and it becomes her ‘normal’. We all need to get prepared for the period since it comes with a lot of sacrifices and hardships.
Reference
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