HS$440-5$: Differentiate between the methodologies and processes used in preparing budgets for health care organizations.

PC$-2\mathrm{.}2$: Formulate innovative solutions for identified initiatives.

Instructions:

Your hospital is considering the purchase of a CT scanner. You, as the administrator for the Imaging Department, have been asked to conduct a financial analysis on the proposed purchase. Given the information and assumptions below, use Microsoft Excel to conduct a net present value analysis of a capital equipment request. When complete, think of some areas of the analysis where you might be able to make changes to improve the performance of the project. What are your thoughts on how you can positively influence this project?

The information below is provided for your use in conducting the analysis on the CT Scanner. All prices and expenses are current as of year $0.$ Any planned growth will occur in year $1.$

CT Scanner Initial Purchase price

$1,750,000$

Delivery, installation, and training

$175,000$

Annual maintenance contract

$25,000$

Estimated annual volume

$2,000$

Supply cost per scan$1$

$130$

Technician salary and benefits$2$

$84,000$

Average charge per scan$3$

$325$

Discount rate

$8\mathrm{.}00\%$

Expected useful life of the scanner

$8$ years

Estimated salvage value after $8$ years

$250,000$

$1.$ Annual supply inflation rate is estimated to be $6\%$ through the next $8$ years

$2.$ Employee wages and benefits are estimated to grow at $4\%$ annually through the next $8$ years.

$3.$ Charges for CT scans is estimated to increase $5\%$ annually through the next $8$ years

$4.$ Round all calculation to the nearest whole dollar.

Details:

Use Excel to organize your answers. Your table should be organized similar to the example below. The cells labelled $1-65$ are cells you must populate based on the inputs provided.