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     Joslin Diabetes Center


    Wanting to surface as many good ideas as possible, your organization has invited all employees to submit capital budget proposals that would help the organization respond to industry trends and achieve its mission and strategic goals. Employees who submit a proposal that is accepted for implementation will receive a $2,500 bonus.
    One example of an appropriate capital budget item may be an ultrasound machine. It has an expense purchase, but generates revenue from billing. Another example would be the replacement of equipment whose useful life has been fully realized.
    An example that would not work for this assignment would be expanding the business by building a new office. While this may allow the business to see more patients it is well outside the scope of a capital budget item to consider. Another example that would not work for this assignment would be to develop a mobile vaccination service to treat underserved patients in the community. This does not necessarily generate revenue and has a large start-up expense.
    Keeping in mind the examples of appropriate and non-appropriate capital budget item examples, review the website and financial statements from your organization (the organization you have selected for your final project—Venice Family Clinic or Joslin Diabetes Center). Identify a capital budget item that you will use as the basis of your capital budget proposal.
    Note that while you will submit a single proposal, your proposal might include multiple items. For example, you might propose that the organization acquire a new piece of equipment. Implementation of that item (the equipment) might require additional items such as software, spare parts, etc.



Subject Writing a proposal Pages 4 Style APA


Joslin Diabetes Center

Joslin Diabetes Center is a research facility as well as a medical center that provides specialized medical care to diabetic patients. It is dedicated to discovering advanced innovative therapies for patients suffering from diabetes. From the financial statements it is obvious that the facility has consistently reduced its long term debts from $8,119,180 in 2011 to 5,582,042 in 2012 and ultimately to 3,840,328 in 2013. The company requires a new ultra sound in its center to diagnose a variety of ailments that affect diabetic patients including diabetic complications such as abnormal blood flow and blood vessels constrictions or expansions (Lopez, Betancour and Salazar, 2013).

The cost of a new Volson GE 730 4D Expert ultrasound machine costs about $45,000. The efficiency and reliability of a refurbished ultrasound machines cannot be guaranteed hence that option to buy a used machine has been ruled out. The machine comes with additional costs of transportation and installation expenses amounting to $5,000. One year warranty is offered plus a free service for the first one year. Financing costs have been estimated at 10% annually.

Capital budgeting techniques that may be applied to appraise the expenditure on ultrasound machine are varied. The most reliable ones that are commonly used are the Net Present Value (NPV), Internal Rate of Return (IRR) and the Payback period. From the high diabetic cases that are attended to at the clinic it is estimated that the machine would earn revenues close to $30,000 annually and the discount rate is 10%.

The NPV of the project that has been estimated for 3 years will have a net present value of $19,606 in three years’ time while its internal rate of return would be 29.33%. The IRR is more than the cost of financing hence its acceptable while the NPV is positive (CSUN, 2018). The payback period is less than two years. All the three capital budgeting techniques show positive results. The proposed project should be accepted.

                  Capital Budgeting for Joslin Ultrasound Machine



Project A

















Less than 2yrs




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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