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    Prompt: Because you have done such a good job with the consulting assignments, your boss has asked you to lead the development of the department’s annual operating budget for the healthcare facility you selected, (Joslin Diabetic Center) ). She has also offered to review an outline of your capital budget proposal before you submit it for consideration by the decision makers. There are two parts to this assignment that you will submit together:

    **Part One: Departmental Budget First, create your annual departmental budget per your boss’ request. As part of your capital budget proposal, you will need to apply the cost of your capital budget item, and all associated costs, to a specific department within the organization. You will also need to account for any additional revenue that may be generated as a result of purchasing your capital budget item as well as any expenses that might be incurred. In the event you selected a capital item that impacts the entire organization, apply the cost of your capital budget item to the entire organization.

    Using the budget sample as an example, create your own departmental operating budget in the Operating Budget sheet. Please note that this is just an example provided to help you get started. You do not have to use all of the budget items found in the budget sample if they do not apply to your department. You may find that additional items are appropriate to include for your department beyond what is included in the sample. Use the Capital Budget sheet to calculate the costs of your capital budget item.

    As you create your department’s budget, consider items such as hiring new staff, training, technology, and any other related costs. Also account for the potential revenue generated as a result of implementing the capital budget item as well as any potential expenses incurred by your department. These should be highlevel estimates at this point. You’ll be doing some research on implementation of your capital budget item in Milestone Three that will help you refine your estimates of potential revenue and expenses later on. Part Two: Proposal Outline Second, outline your proposal for your boss to review. With the goal of submitting a proposal that will help your organization and win that $2,500 bonus, you will create a 1–3 page outline of your final project presentation that identifies the key points you will use to address critical elements of the final project, providing sufficient detail to allow your boss to provide constructive feedback on your proposal. Your outline should incorporate, where applicable, the knowledge, concepts, and principles that you have learned in Modules One through Five. Review the example proposal outline to gain an idea of what the start of your outline may look like. The notes and ideas you generate in this outline may inform the speaker notes, visuals, and text that you will include in your final project proposal presentation.

    Guidelines for Submission: You will submit two deliverables for this assignment. Your departmental budget must be submitted as an Excel spreadsheet. Your proposal outline must be submitted as a single document. It should be 1–3 pages in length with double spacing, 12-point Times New Roman font, one-inch margins, and citations in APA style where applicable.
    . Introduction: (Identify areas of concern) a) Capital Budget Item b) Strategic Goals

    2. Proposal: a) Financial Research b) Organizational Resources (Identify processes and equipment- identify solutions that are part of their proposal) c) Communication

    3. Budget: a) Financial Information

    4. Impacts and Justification: a) Short-term impact b) Long-term impact c) Strategic Planning (Implementation of the capital item) d) Conflicts

    Current Year New Budget Comments
    Outpatient Revenue
    Office visits 1,000,000
    Immunizations 500,000
    Well Child Exams 500,000
    Pregnancy Care 300,000
    Diabetes education 150,000
    Mammography 2,500,000
    MRI 5,000,000
    Total Gross Patient Services Revenue 9,950,000

    MD $2,500,000 MD salaries combined
    RN $800,000 RN salaries combined
    LPN $350,000 Nursing staff salaries combined
    Other Staff $180,000 Admin staff salaries combined
    Admin 766,000 20% estimate of total salary expense
    Total Salary Expense $4,596,000
    Medical Supplies 485,000 What is needed for the clinic to operate?
    Office Supplies 265,000 What is needed for the clinic to operate?
    Total Supplies 750,000
    Equipment $250,000.00 Additional equipment needed?
    Legal Fees $108,786
    Professional Fees 152,288
    Utilities 497,694
    Repairs and Maintenance 506,984
    Equipment Lease 183,509 Is your capital budget item a lease?
    Insurance 154,996 What insurance is required for the practice?
    Miscellaneous Expense 15,000 Unknown expenses that come up
    Bad Debt Expense 80,000 Uncollectable accounts

    Total All Expenses $7,295,257

    Excess (Deficit) Revenues over Expenses $2,654,743


Subject Writing a proposal Pages 5 Style APA


Consultation & Diagnostic Department Budget Proposal


The annual budgetary estimate for the consultation and diagnostic services for the financial year ending December 31, 2019 has been summarize below. The total revenues forecasted for the financial year is US$190,000 while the total expenses amount to US$172,000 leaving a surplus of US$ 17,500. The estimate is slightly higher than the average budget by about US$55,000. The department unanimously opted to include the estimates for the procurement of a new ultrasound machine. The breakdown frequency of the old machine has contributed immensely to the reduction of total revenues generated by the department. The strategic goal of the department is to be able to generate enough revenues that can sustain all the operations of the department.

                                         Financial Research

The total cost of acquiring the new machine (Volson GE 730 4D Expert) is US$ 45,000 and the other expenses of transportation, installation and training would amount to an extra $10,000 (Kompareit, 2018). The total cost of the project would be $55,000 while the annual revenues that are expected to be generated from the machine amounts to US$30,000 per year. The machine is expected to recover the initial acquisition and other preliminary expenses within the first two years.     

                            Application of the Ultrasound Equipment

The targeted ultrasound equipment has been earmarked to revolutionized the current diagnostic procedures as the machine is set to introduce new technology in medical therapy including new modes of operation that is applicable to non-invasive pathologies studies that are related to the heart, brain, eyes and other injuries such that maybe caused by tumors and hematomas (Lopez, Betancour, and Salazar, 2013).


The capital expenditure that the department has proposed is expected to generate enough revenues to pay back the initial investment within the first years of its operation. The Net Present Value (NPV) of the equipment is $19,605 while the Internal Rate of Return (IRR) is 29.33%. The NPV is both positive while the IRR is more than the cost of capital (CSUN (2018).

Financial Information

Joslin Diabetes Center

Consultation & Diagnostic Operating Budget Estimates

Gross revenue

Outpatient revenue










Total Gross Revenues



Consultants (2)


RN (3)


LPN (4)


Admin & Other staff


Total Salary Expenses



Cleaning Detergents


Office Supplies


Other Supplies


Total Supplies


Capital Budget

Professional fees


New Ultrasound Equipment


Transportation & Installation


Other Expenses




Repairs & Maintenance


Total Capital Budget


Total Expenses


Surplus for the Department


Impact and Justification

The short term impact of the ultrasound machine would be to increase efficiency in the department. The frequent breakdown that had been associated with the departments old ultrasound machine would be history as the new machine would provide a more reliable and efficient service.

The long term effect of the new machine would be sustainable financial security as the machine would be able to repay its initial acquisition and preliminary costs within the first two years of its operations. The department would earn extra profit based on the machines efficiency besides the extra income that maybe generated due to its other applications that are based on modern technology.

The major conflict would be the machines modern technological application would require specialized staff. Training and acquiring new staff who are experienced in the use and application of the new machine would be costly to the department. However, the distributors of the machine have offered to train the current staff but later the company would have to pay in future for staff training.



CSUN (2018) Capital Budgeting retrieved November 20, 2018 from http://www.csun.edu/~zz1802/Finance%20303/Web-Stuff/Lecture-Notes-Final.pdf

Kompareit (2018) Compare Ultrasound Machine Price Quotes and Save an Average of 19%, retrieved November 20, 2018 from https://kompareit.com/business/medical-equipment-buying-portable-ultrasound-machine.html

Lopez, F.A., Betancour, M.A., and Salazar, E.C. (2013) Application of Ultrasound in Medicine Part: The Ultrasonic Transducer and its Associated Electronics, Tecciencia retrieved November 20, 2018 from http://www.scielo.org.co/pdf/tecci/v8n15/v8n15a03.pdf


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