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Capital Investment Justification and Variance Analysis in Hospital Management: Evaluating Equipment Purchases and Budget Performance

This assignment examines capital investment decisions and variance analysis in hospital management.

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    Capital Investment Justification and Variance Analysis in Hospital Management: Evaluating Equipment Purchases and Budget Performance A. 1.Choose a major capital piece of equipment to be used in the radiology department of a hospital (e.g., CAT scan, MRI, nuclear medicine camera, etc.). Next, research and choose a vendor. Vendors such as GE, Siemens, or others can be located on the Internet. 2.Request information on cost justification and ROI from the vendor. 3.Write a justification for capital purchase (750 - 1,000 words) to your vice president as to why this would be a good investment for the hospital. Include the operating costs you took into consideration and what facility considerations are involved regarding this new piece of equipment. 4.Cite a minimum of three references to support your rationale. Solution: 1. The cost of different CAT machine depends upon the technology systems: Siemens $ 200000 usd approx Toshiba $ 180000 usd approx Beckam coulter $ 250000 usd Sharp $ 200000 usd GE $ 300000 usd approx Phillips $ 140000 usd approx 2. Somatom Emotion is the most popular CT in the world. This machine is consists of 16 slice CT service. Cost of Machine $ 200000 Life of machine 7 years Rental Saving $ 210/ month Revenue $ 200 USD per case and 20 patients per day Other Cost $ 3000/ month Cost of machine $2,00,000 Revenue $1,00,000 (20 patients per day @ $ 200 per case) Rental Saving $210 Training Cost $1,000 Maintainance Cost $2,000 Net Saving $97,210 ROI 49% 3. To, The Vice President Subject: Capital Justification of CT Scan Machine

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