Capital Project

1020 Words5 Pages
Capital Budget Project HCS/571 November 26, 2012 Capital Budget Project Introduction The amount of money that can be borrowed has many entities and factors that influence the capital budget of the hospital (Cleverly, Song, & Cleverly). The Allen Pavilion of NY Presbyterian Hospital (NYPH) is projecting that the purchase of an MRI machine for their facility will be a venture worth pursuing. The growth and demand of the small community of Inwood NY currently is transported or sent to other facilities or to the downtown campus Milstein. This increase in demand has taken over the capacity of what the Milstein campus can efficiently serve. The small community pavilion serving this…show more content…
The payment per exam can be divided by the fixed costs (equipment, space, staff, and maintenance) and minus the variable costs (supplies, fees and billing costs) to imagine the probable profitability opportunity of an in-house MRI and to assure that this is financially feasible. Financially speaking, this is a good choice of use of the hospitals resources considering the demand for MRI imaging in our community, an increase in utilization rate, increase in case mix index and overall customer satisfaction. The numerous advantages of the in-house MRI will increase the return on the MRI investment. Financial Options Financial options for acquiring an in-house MRI are offered. Cash purchase is one option in which the hospital will own the MRI machine outright. Using available cash makes this purchase an asset on the balance sheet with no debt or liability. If there is no available cash, leasing is another option. This moves the funding to the operational budget (Cleverly, Song, & Cleverly 2011) which will minimize credit requirements. This can provide an equilibrium of the revenues to the expenses on a monthly basis. Another way to fund the imaging machine could be a bank loan. Line of credit has its drawbacks as well and must be considered reducing the ability for future capital if needed. Magnetic Room Location The MRI has a very powerful magnetic field and space is an
Get Access