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Capital budgeting is mainly a process of planning which is usually done with the objective of determining whether a certain investment project is worth taking or not.  This basically involves long term projects that are very costly for instance; purchasing a hospital's machinery. There are few important things that need to be done before this step is arrived at. For this essay the machine that was decided upon was the CAT scan. Research about the hospital machine was sourced from the Siemens vendor. The necessary information about the effectiveness and the total operation costs were accurately obtained from the supplier of the CAT scanner.

Following the difficulties that we have been experiencing at the hospital because of an old CAT scan machine I decided to carry out a research on an effective new machine which is worth our investment. I settled on the CAT scan because it is very effective. Computed axial tomography is a very important radiography machine. This machine is used by employing an imaging method which is usually created through computer processing. By using this machine essential three dimensional images can be produced using geometrical processing. The CAT scan makes it possible to obtain these detailed images from several two dimensional objects. On addition, a practitioner is also able to obtain X-ray images in series from a single rotation through a specific axis (Lin, Leung & Wang, 2008). The CAT scanner works effectively with the aid of an imaging computer which makes procession of three dimensional images to be possible. Through a CAT can the practitioner is able to get volumes of information which are usually influenced through a very important process referred to as windowing. By employing the windowing process a practitioner is able to outline the different structures of the body basing on their capability to resist the beam of the X-ray.


Every organization seeks to save money through some of the projects they take. Therefore, it is very important for a company to put its money in projects that would maximize most of its strategic goals. For this reason it is always important for the approval of a given project to be very comprehensive. Despite, the fact that the approval process is supposed to be very intensive it is necessary for the project management team to ensure that the resources that will be pumped into the project are minimal. For this reason the purchase of the CAT scan will enable the organization to accomplish most of its objectives. Every dollar that will be spent on the CAT scan project will raise a maximum leverage (Zaman, Robinson & Petrou, 2009). This particular investment project will help the hospital to solve some of its revenue challenges. Just like other health cares, this hospital continues to face normal health care challenges in the area of income generation. Therefore, the purchase of this machine will greatly improve the services that we offer to our clients and on addition it will help the organization to raise some revenues.

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It is quite common for hospital equipments like any other to wear out. Therefore, in case of such occurrences there is need for replacement if efficiency has to be maintained. There are many things that are currently happening in hospitals that require immerse investments. For instance, a law has been passed that requires implementation of a changed out patient services as well as coding. But for our hospital it has been found to be convenient to acquire a new CAT scan machine because of the need at the hospital. This is because there is an urgent need to improve treatment and disease diagnosis which can only become a reality by acquiring sophisticated equipment like a CAT scan.

Purchasing a CAT scan is a very good investment for the hospital because it will enable us to meet one of our most important goals which are provision of quality health care services (Lin, Leung & Wang, 2008). Practitioners will be in a position to make proper diagnosis and treatment which will greatly improve the rate of patient recovery. On addition, the hospital will be able to generate some of its operational income through the collection of the money obtained from the rendered services. Despite the fact that there are some challenges which are associated with this medical equipment it very evident that its advantages are far much beyond its limitation. On addition, there is no single equipment that lacks its own challenges and limitation. CAT scan is generally cheaper than the MRIs and that is one of the important factors that were put into consideration before settling on this medical gadget.

The prices of the CAT scanners greatly vary depending on the consulted vendor. Because of the great variation in prices we decided to settle on Siemens because they are among the best venders and we are also assured of their services. On addition, we are sure of durable equipment with a relatively affordable price. In general the prices of CAT scan usually vary from about $ 1,200 to $ 3,200 depending on the above mentioned factors. This investment is worth the risk because there are a lot of benefits that will be accrued from it. The CAT scan is very useful in diagnosing specific ailments as opposed to MRI which effectively diagnosis multiple complications. CAT scan is advantageous in that its operational cost is greatly reduced by using CT256 as opposed to CT64 (Teague et al, 2009). The usage of the first type of the scan can result to great savings. On addition the equipment is very accurate when it comes to diagnosis.

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