Radiology Case Scenarios

The Radiology department would like to expand from its current capacity to keep up with the rising demand of medical imaging in the area and to keep with the new technology that is changing medical imaging and medicine in general. The current radiology department has about six full time employees and three part time employees. The new expanded department will have about twelve fulltime employees and six part time employees. The radiology department is going to add a computerized tomography machine and ultrasound machine. There is only one facility that offers CT scan and ultrasound in the area and the facility is about forty miles away. This will ensure that all our patients are getting all their imaging here at the hospital instead of driving
$250,000 has is budgeted for building renovations and expansion, in order to make room for the new department. Both machines will be purchased from General Electric (GE) and GE engineers will install the machines including setting it for use. The CT scan will cost about $225,000 and the ultrasound machine will cost $100,000 including installation and new room renovation cost. There is an estimated $340,000 to hire six fulltime members and three part time members to operate the CT and Ultra sound Machines. $100,000 has been budgeted to marketing to patients, physicians, and clinics in the area to know about the expansion and the advantages to patient care that comes with
According to the last two fiscal years, the radiology department had revenues of $1,500,000 and incurred expenses totaling $875,000, with a profit of $625,000. From our calculation the new CT and ultrasound machine will bring in about $250,000 in the first year double in the second year. With the new investment and how the radiology department revenues has been growing the last six years, the department revenues will continue to grow and we will be able to recoup the money in two years or less, taking into account the new revenue coming from CT and ultrasound