Which of the following would be included in the capital budget?

• A. Renovation of a major wing in a hospital
• B. Call light systems
• C. Hospital beds and medication carts
• D. Routine supply purchases

Answer: (A)

Capital budgets are used for long-term, high-cost investments that change the facility or its capacity and have a multi-year payoff. Renovating a major wing is exactly that kind of project—it alters the building itself, improves capacity and services, and spans years in planning and funding. It’s a strategic investment in the infrastructure of the hospital, not a routine purchase.

Routine supply purchases and everyday equipment fall under operating budgets because they’re ongoing, less costly, and needed to run daily operations. Even though beds or carts are assets, they’re typically categorized as regular equipment replacements or operating expenses unless they’re part of a large, multi-year capital equipment program. Call light systems might be capital if they involve a major upgrade, but the most straightforward example of a capital project here is the major wing renovation, making it the best fit for the capital budget.