Business of Radiology 101

Scenario: Buy a New Scanner

You decide to replace an existing CT scanner with the purchase and installation of a new unit. You decide to take out a new loan to finance the purchase. See the capital expenditures section of the spreadsheet in red .

  • What if you find a scanner model that still fulfills your performance needs but is less expensive? Substitute $1,500 for price. What happens to down payment? Interest payments?
  • EXPLAIN

Now assume your cash is tight. You find a bank that will accept only 10% down and still give these same rate and loan term.

  • Substitute 10% for the down payment.
  • What happens to interest payments?
  • EXPLAIN

It is more likely that to secure a smaller down payment percentage, the bank will ask for more expensive loan terms.

  • Substitute 7.5% for loan rate.
  • What happens to interest payments?
  • EXPLAIN

*  all values represent 1,000s of dollars.

      Year 0 Year 1 Year 2 Year 3 Year 4 Year 5
Net Revenues Δ
Cost of Sales  
Operating Expenses Δ
Operating Profit (EBIDAT)    
Interest Expense    
Earnings before Deprec, Amort & Tax (EBDAT)
Depreciation Expense    
Tax    
Net Income    
Cash Flow (cumulative)      
Cash Flow (annual)    
Net Present Value of Cash Flow discount rate  
Return on Investment      
Acquisition Cost     Price Renovation IT / PACS Sales Tax TOTAL  
    $  
Scanner Useful Life (yr)              
Scanner Residual Value (% of new price)          
Financing (Loan) Details     Money Down Principal Rate Term (yr)    
  Down Payment    
Interest Payment (annual, not monthly)   Year 1 Year 2 Year 3 Year 4 Year 5