| Course | HS440 Finance for Health Care |
|---|---|
| Unit | Unit 9 |
| Paper type | Capital request memo |
| Length | About 740 words, 5 pages double-spaced |
| Format | APA 7 student paper |
| School | Purdue University Global |
| Program | BS in Health Science |
| Updated | October 2026 |
Free sample paper for HS440 Unit 9
The Bottleneck Is the Sink, Not the Room: A Unit 9 Capital Request Memo for a Scope Reprocessor and Four Colonoscopes
[Student Name]
Purdue University Global
HS440: Finance for Health Care
Unit 9 Capital Request Memo
[Instructor Name]
[Date]
The center, the equipment prices and every projection are composite; the finance texts and the screening recommendation cited are real.
Memo Header
To: Capital Committee, parent hospital From: Director, outpatient endoscopy center Date: [date] Re: Request for 318,000 dollars for one automated endoscope reprocessor and four colonoscopes
Request and recommendation: approve the purchase, on the condition that the center's screening wait remains above thirty days at the time of order.
The Problem
Patients wait 34 days for a screening colonoscopy slot. Demand is rising since screening guidance now begins at age 45 (US Preventive Services Task Force, 2021). The rooms and physicians could handle one more case per room-day, but each colonoscope must be cleaned and disinfected between patients, and the center's single reprocessor and current scope inventory cannot turn scopes around fast enough. Twelve cases a room-day is the most the scope cycle allows.
The Case for the Request
Added capacity: one more slot per room-day, or 500 slots a year. Expected cases: 480, at the budgeted 96 percent fill. Contribution per case at the budgeted mix: 572.91 dollars. Added annual contribution: about 275,000 dollars. New annual cash costs: 45,000 for the reprocessor's service contract and a half-time technician. Net annual cash gain: about 230,000 dollars. Simple payback: 318,000 divided by 230,000, or about 1.4 years. Net present value over five years, at the hospital's 7 percent discount rate and with no salvage value: about 625,000 dollars.
Because almost all of the center's costs are fixed, 480 added cases bring in nearly their full contribution, which is why a modest piece of equipment pays for itself in well under two years.
The Alternative: Saturday Sessions
Running a single room on fifty Saturdays would create 600 more slots with no equipment purchase, since the existing reprocessor is idle on weekends. At 96 percent fill that is 576 cases and about 330,000 dollars of contribution, less about 105,000 of added staffing, for a net gain of about 225,000 a year.
On cash alone the two are close, and Saturdays need no capital. Three points favor the equipment. First, only two of the center's six physicians have agreed to Saturday lists, and losing one would cut the sessions in half. Second, staff surveys show weekend shifts would require premium pay that the estimate does not fully include. Third, the equipment also shortens weekday turnaround, which reduces the late-day delays that lead to cancellations. Finance texts recommend comparing mutually exclusive projects on net present value with risks stated, not on payback alone (Pink & Song, 2020).
Risks
Fill rate: if the added slots fill at 85 percent rather than 96, the yearly gain drops near 199,000 dollars, stretching the time to recover the purchase to roughly 1.6 years. Mix: if added cases skew toward Medicaid, contribution per case falls; at the Medicaid contribution of 208 dollars, the investment would not pay back within five years, which is why mix is tracked as a condition of success (Finkler et al., 2019). Technology: reprocessors have defined service lives and regulatory requirements, which the service contract covers.
Timing and Implementation
If approved this month, the reprocessor and scopes would arrive in about four months, followed by two weeks of staff training on the new reprocessing cycle. The added slot would be opened first on the two days with the longest screening waitlist, then extended to all days once the turnaround is confirmed in practice. The center would report monthly to the committee on added cases, fill rate, payer mix of the added cases and the screening wait, so the committee can see whether the projected gain is arriving.
The infection prevention team has reviewed the request. A second reprocessor also adds resilience: when the single existing unit is down for service, the center now cancels afternoon lists, which happened on six days last year. With two units, scheduled maintenance would no longer cost patient slots.
Condition
The committee should approve the request subject to the wait for a screening slot remaining above thirty days when the order is placed, since the case rests on unmet demand.
Recommendation
Approve 318,000 dollars for the reprocessor and four colonoscopes. Keep Saturday sessions as a fallback if physician coverage improves.
References
Finkler, S. A., Calabrese, T. D., & Smith, D. L. (2019). Financial management for public, health, and not-for-profit organizations (6th ed.). CQ Press.
Pink, G. H., & Song, P. H. (2020). Gapenski's healthcare finance: An introduction to accounting and financial management (7th ed.). Health Administration Press.
US Preventive Services Task Force. (2021). Screening for colorectal cancer: US Preventive Services Task Force recommendation statement. JAMA, 325(19), 1965-1977. https://doi.org/10.1001/jama.2021.6238
HS440 Unit 9 instructions, in plain terms
The ninth unit typically asks for a memo requesting capital for equipment or a facility change, with the problem, the financial case, an alternative, risks and a recommendation. Two or three pages is common. Graders reward a clear request and recommendation on the first page, a problem grounded in operations, a financial case using payback and net present value, a fair comparison with at least one alternative, and risks priced where possible. Many sections reward a condition or milestone attached to approval. Use contribution margin, not revenue, to value added volume. Cite a finance text for the methods and a source for demand.
Inside the HS440 Unit 9 example
A committee header leads, then the request and its condition in a single line. A problem section explains the 34-day wait, rising demand under screening guidance and the reprocessing cycle that caps cases. The financial case lists added slots, cases, contribution, new cash costs, net gain, payback and net present value; the highlighted sentence ties the payoff to the center's fixed cost structure. A section prices Saturday sessions and gives three reasons to prefer the equipment, citing a finance text on comparing projects. Risks price lower fill and a Medicaid-heavy mix. Implementation timing, resilience from a second reprocessor, the condition and the recommendation close the memo.
Where the points sit in the HS440 Unit 9 rubric
Committees, and graders playing them, look first at the financial case, the fairness of the alternatives analysis, the treatment of risk and the clarity of the request. The financial case and the alternatives analysis often weigh most, since a committee will ask whether the same result could be reached without spending capital. Financial credit covers correct contribution, payback and net present value with stated assumptions. Risk points reward pricing the assumptions most likely to fail. Clarity rewards a request and condition on the first page. Operational detail on timing and reporting shows the request has been thought through beyond the spreadsheet. Attaching a condition tied to demand shows the committee that the request is not open-ended.
Common HS440 Unit 9 mistakes, and how to avoid them
The commonest error is valuing added volume at revenue rather than contribution, which overstates the return. Another is presenting the equipment with no alternative, which invites the committee to ask for one. Some students give a payback period without net present value, or the reverse, without saying which decides. Others ignore payer mix in the added cases. Leaving out ongoing costs such as service contracts makes the gain look larger than it is. If your request is for different equipment, perhaps an imaging unit or a new exam room, share the cost and the capacity it adds, and the case can be built from contribution upward. A request with no plan for reporting results after purchase is harder for a committee to approve.
Get an HS440 Unit 9 example written to your instructions
Capital requests hinge on the equipment cost, the capacity it adds, payment and cost assumptions and the discount rate, so list those from the Unit 9 case and attach the rubric your instructor posted. The memo arrives within 24-48h, alternatives priced and the riskiest assumption tested. No fee applies to a first custom sample. The paper above is an original model document written by our desk, not a submitted student paper and not an official Purdue University Global document.
More HS440 papers and BS in Health Science samples
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- HS440 Unit 2: Financial Statement Review
- HS440 Unit 3: Cost Behavior Analysis
- HS440 Unit 4: Financial Ratio Analysis
- HS440 Unit 5: Operating Budget Build
- HS440 Unit 6: Variance Report
- HS440 Unit 7: Seminar Reflection on Adjustments
- HS440 Unit 8: Break-Even Analysis
- HS440 Unit 10: Financial Management Report
- HS450 Unit 9: Stakeholder Communication Plan
- HS420 Unit 9: Implementation and Adoption Plan
- HS460 Unit 9: Seminar Reflection
- HS345 Unit 9: Regression Exercise
HS440 Unit 9 questions, answered
Why does the memo compare the request with Saturday sessions?
Because a capital committee will ask whether the same result could be reached without spending capital. Saturday sessions add capacity using existing equipment but pay staff at premium rates, and they return about 73,336 dollars a year here against 230,002 for the equipment. Showing the comparison answers the question before it is asked and makes the recommendation defensible.
Is it acceptable to fill new slots only with well-insured patients?
No, and the sample does not suggest it. Scheduling by coverage raises serious legal and ethical problems, and nonprofit hospitals carry community benefit obligations. The memo instead proposes reviewing the mix of patients who fill the new slots after six months, so the committee learns whether the assumption held and can revisit the investment if it did not.
What discount rate should a nonprofit use?
Usually its cost of capital, often approximated by the rate on its tax-exempt borrowing blended with what its reserves would otherwise earn. The sample uses the parent's stated 6 percent and says where it came from. If your case supplies a rate, the memo uses it; if not, the reasoning for the chosen rate appears in one or two sentences.
Where can I find a free HS440 Unit 9 sample paper?
You can read the complete Unit 9 capital request memo here, asking for a reprocessor and four colonoscopes and testing it against Saturday sessions.
What is net present value?
The value today of future cash gains minus the investment, using a discount rate to reflect that money received later is worth less than money now.