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Market Estimation and Pro-forma Income Statement Name:
Institutional Affiliation:
Date:
2
Market Estimation and Pro-forma Income Statement
Project summary
This assignment will present a case where the firm intends to invest in a new trauma center. The rationale for this recommendation is that ECRH intends to expand its services to match the increasing demands of the surrounding populations. Targeting an emergency department will expand the target population likely to seek emergency services at the facility. The assessment assumes that the facility is in Houston, Texas, and that most consumers will seek
emergency services in the new trauma center. Market size determination
The first step is establishing the potential market size the facility may target and address. This section is based on the perception that the hospital will invest in a new trauma center. The facility will help deliver critical services to people involved in accidents and other incidents that require emergency interventions (
Subramanian, 2021
). In this context, it is, therefore, assumed that the target market for the facility is the general population. The rationale for this argument is that emergency incidents may affect any person regardless of their age, gender, and occupation. For example, accident victims may need emergency interventions following an incident.
On the other hand, people diagnosed with acute and chronic illnesses may require such services due to the magnitude of their conditions. However, the facility targets the population residing within its geographical location. The estimated population in Houston is 2304580. On the other hand, the facility may refine the target population to the people involved in motor crashes. In 2021, it was reported that the region had over 66988 accidents (White, 2024). Assuming that at least such cases will be reported, the firm should target 40%. This proportion
3
represents the existing market for its new trauma center. Therefore, the facility projects that the total market will comprise 26800 people. Breakeven evaluation
Breakeven elements
Breakeven costs and revenue
Costs Fixed costs
(A set one-time cost that will be required to produce or deliver a product or service, such as the construction of a new office or lab space. This occurs once, and does not vary based on the number of products or services delivered)
$100000 for new site construction Variable costs
(Costs that repeat each time the product or service is manufactured or delivered, such as physician salary per procedure or visit, office staff salary per procedure or visit, supplies used per procedure or visit, calculated per individual visit).
Practitioner costs: $80 Supplies: $30 (case dependent)
Staff costs: $50 Others: $10 Revenue
per Product or Service delivered (per visit)
$300 per patient attendance. Breakeven Quantity Required (Fixed Costs
(100000/(300-170)) = 769.23 (770
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D
E
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st
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10
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6
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A
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------
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1
2
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6
8
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4
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3
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1
2
3
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The manager of the Oak Hills Swimming Club is planning the club’s swimming team program. The first team practice is scheduled for May 1. The activities, their immediate predecessors, and the activity time estimates (in weeks) are as follows:
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Activity
Description
Immediate
Predecessor
Optimistic
Most Probable
Pessimistic
A
Meet with board
------
1
1
2
B
Hire coaches
A
4
6
8
C
Reserve pool
A
2
4
6
D
Announce Program
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2
3
E
Meet with Coaches
B
2
3
4
F
Order Team Suits
A
1
2
3
G
Register Swimmers
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1
2
3
H
Collect Fees
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2
3
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B
F
H
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C
G
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D
E
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Activity
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A
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9
14
B
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7
3
4
D
8
11
14
7
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0.66
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0.10
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Year 2
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0.13
$0
0.50
$200000
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Immediate /predecessor (s)
Duration (weeks) No. of Staff Needed
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3
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5
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4
B
D
A
7
2
E
B.C
8
2
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5
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EF
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3
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F
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Immediate
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A
Meet with board
1
1
2
B
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A
4
8
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1
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3
G
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2
3
H
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1
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1
1
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Latest
Latest
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A
B
D
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F
G
H
I
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Probability
Impact
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5
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Question Viewer
Activity
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A
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Pessimistic
Immediate Predecessors
A
1
2
3
-
B
4
6
8
A
C
2
4
6
A
D
1
2
3
B, C
E
2
3
4
B
F
1
2
3
A
G
1
2
3
D
H
1
2
3
G
I
1
1
1
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A
1
2
3
-
B
4
6
8
A
C
2
4
6
A
D
1
2
3
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E
2
3
4
B
F
1
2
3
A
G
1
2
3
D
H
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2
3
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I
1
1
1
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Optimistic
Most Probable
Pessimistic
Immediate Predecessors
A
1
2
3
-
B
4
6
8
A
C
2
4
6
A
D
1
2
3
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E
2
3
4
B
F
1
2
3
A
G
1
2
3
D
H
1
2
3
G
I
1
1
1
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Probability
0.25
0.45
0.3
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$190,000
$170,000
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$420,000
$400,000
Electrical action
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$240,000
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(i, j)
Activity Predecessor
Activity Time (weeks)
Normal Crash
Activity Cost
Normal Crash
a
(1,2)
---
16
8
$2000
$4400
b
(1,3)
---
14
9
1000
1800
c
(2,4)
a
8
6
500
700
d
(2,5)
a
5
4
600
1300
e
(3,5)
b
4
2
1500
3000
f
(3,6)
b
6
4
800
1600
g
(4,6)
c
10
7
3000
4500
h
(5,6)
d, e
15
10
5000
8000
a. Construct the project network
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Note:-
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Answer completely.
You will get up vote for sure.
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Most
Activity
Predecessor(s)
Optimistic
Probable
Pessimistic
A:
Negotiate contract with
-
10
11
12
selected musicians
B:
Reserve site
-
8
10
12
C:
Manage travel logistics
A
2
7
9
for music group
D:
Screen & hire
B
4
5
6
security personnel
E:
Arrange advertising
C
7
7
7
& ticketing
F:
Hire parking staff
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8
9
16
G:
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E
6
7
11
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At a local university, the Student Commission on Programming and Entertainment (SCOPE) is preparing to host its first rock concert of the school year. To successfully produce this rock concert, SCOPE has listed the requisite activities and related information in the following table (duration estimates measured in days).
Immediate
Most
Activity
Predecessor(s)
Optimistic
Probable
Pessimistic
A:
Negotiate contract with
-
10
11
12
selected musicians
B:
Reserve site
-
8
10
12
C:
Manage travel logistics
A
2
7
9
for music group
D:
Screen & hire
B
4
5
6
security personnel
E:
Arrange advertising
C
7
7
7
& ticketing
F:
Hire parking staff
A, D
8
9
16
G:
Arrange concession sales
E
6
7
11
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- The Custom Bike Company has set up a weighted scoring matrix for evaluation of potential projects. Following are five projects under consideration. Criteria Strong sponsor Supports business strategy Urgency 10% of sales from new products Competition Fill market gap Weight 2 4 2 5 1 2 Project 1 6 8 9 5 4 0 Project 2 9 8 4 2 7 10 Project 3 3 2 3 9 4 8 Project 4 9 6 6 1 4 0 Project 5 6 0 7 4 1 0 Using the scoring matrix above, what score would you give to each project?arrow_forwardThe Custom Bike Company has set up a weighted scoring matrix for evaluation of potential projects. Below are five projects under consideration. Using the scoring matrix in the following chart, which project would you rate highest? Lowest? Criteria Criteria: A B D D E Weight: 4 st 4 st 4 3 4 Project 1 8 10 7 6 9 Project 2 8 5 5 8 7 Project 3 Project 4 6 10 10 8 10 5 66 9 6 8 6 Project 5 5 8 6 9 5arrow_forwardThe manager of the Oak Hills Swimming Club is planning the club’s swimming team program. The first team practice is scheduled for May 1. The activities, their immediate predecessors, and the activity time estimates (in weeks) are as follows: Time (in weeks) Activity Description Immediate Predecessor Optimistic Most Probable Pessimistic A Meet with board ------ 1 1 2 B Hire coaches A 4 6 8 C Reserve pool A 2 4 6 D Announce Program B, C 1 2 3 E Meet with Coaches B 2 3 4 F Order Team Suits A 1 2 3 G Register Swimmers D 1 2 3 H Collect Fees G 1 2 3 I Plan first practice E, H, F 1 1 1 b) What is the project expected time? c) What is the probability of completing in 13 weeks? d) What is the…arrow_forward
- The manager of the Oak Hills Swimming Club is planning the club’s swimming team program. The first team practice is scheduled for May 1. The activities, their immediate predecessors, and the activity time estimates (in weeks) are as follows: Time (in weeks) Activity Description Immediate Predecessor Optimistic Most Probable Pessimistic A Meet with board ------ 1 1 2 B Hire coaches A 4 6 8 C Reserve pool A 2 4 6 D Announce Program B, C 1 2 3 E Meet with Coaches B 2 3 4 F Order Team Suits A 1 2 3 G Register Swimmers D 1 2 3 H Collect Fees G 1 2 3 I Plan first practice E, H, F 1 1 1 a) What is the critical path? b) What is the project expected time? c) What is the probability of completing in 13…arrow_forwardProblem 9-14 (Algorithmic) Davison Construction Company is building a luxury lakefront home in the Finger Lakes region of New York. Coordination of the architect and subcontractors will require a major effort to meet the 44-week (approximately 10-month) completion date requested by the owner. The Davison project manager prepared the following project network: B F H Start C G Finish D E Estimates of the optimistic, most probable, and pessimistic times (in weeks) for the activities are as follows: Activity Optimistic Most Probable Pessimistic A 4 9 14 B 5 7 3 4 D 8 11 14 7 17arrow_forwardManager Cafe "Blue Sky" is considering investing 2 (two) projects. Project X is an investment of $ 75,000 to replace a working but outdated cooling equipment. Project Y is a $ 150,000 investment to expand the dining facilities. Relevant cash flow data for the two projects over the expected 2 years are as follows: Project X Year 1 Year 2 Probability Cash Flow Probability Cash Flow 0.16 $0 0.08 $0 0.66 $50000 0.82 $50000 0.18 $100000 0.10 $100000 Project Y Year 1 Year 2 Probability Cash Flow Probability Cash Flow 0.50 $0 0.13 $0 0.50 $200000 0.74 $100000 0.13 $200000 Calculate: Expected value, standard deviation, and coefficient of variation for cash flows from each project. Compute: Risk-adjusted NPV for each project using a cost of capital of 15% for riskier projects, and 12% cost of capital for less risky projects. Which project is more…arrow_forward
- Assuming that you are a project manager for a consulting firm that is planning a feasibility study for a new city centre scheme. The activities for the final phase of the study project have been identified. The logical relationships for the identified activities is as shown in the dependency table below. Table 3.2: Activities for the Final Phase of a Feasibility Study Activity Immediate /predecessor (s) Duration (weeks) No. of Staff Needed A 3 B 5 3 C 4 B D A 7 2 E B.C 8 2 F C 6 5 G EF B 3 H F 10 B D.G 6 5 Table 3.2: Dependency Table Based on the information provided in the table: i. Draw and analyze the network diagram; and ii. Indicate the type of dependency relationships.arrow_forwardAngel healthcare Ltd., has 2 investment opportunities, each costing $120000 and each have expected profit as shown below: Years Project "A' Project "B' ($) ($) 1 40000 30000 2 30000 40000 3 20000 35000 4 15000 30000 Year 1 2 3 PVIF @ 10% 0.909 0.826 0.751 4 0.683 Compute NPV & Profitability Index, Suggest which Project to be preffered at 10%cost of capitalarrow_forwardThe manager of the Oak Hills Swimming Club is planning the club's swimming team program. The first team practice is scheduled for May 1. The activities, their immediate predecessors, and the activity time estimates (in weeks) are as follows. Time (Weeks) Immediate Predecessor Activity Description Optimistic Most Probable Pessimistic A Meet with board 1 1 2 B Hire coaches A 4 8 Reserve pool A 4. 6 D Announce program В, с 3 E Meet with coaches B 4 F Order team suits A 1 2 3 G Register swimmers D 2 3 H Collect fees G 1 I Plan first practice Е, Н, F 1 1 1 (a) Draw a project network. (Submit a file with a maximum size of 1 MB.) Browse. No file selected. (b) Develop an activity schedule. (Round your answers to two decimal places.) Earliest Start Earliest Finish Latest Latest Activity Slack Start Finish A B D E F G H I (c) What are the critical activities? (Enter your answers as a comma-separated list.) What is the expected project completion time (in weeks)? (Round your answer to two decimal…arrow_forward
- Top administrators in a hospital have approved a project to improve the efficiency of pharmaceutical services department by the end of the fiscal year to satisfy new state regulations for the coming year. However, they are concerned about four potential threats (1) the cost to implement the changes may be excessive (2) the pharmacists may resist changes (3) the project may run much longer than expected and not be ready for coming fiscal year, (4) The changes might reduce the quality of drug care in the hospital. The likelihood and negative impact of each threat have been solicited from the managers and are as follows, based on a seven-point scale where seven is the most likely and most negative impact. Threat Probability Impact 1 5 3 2 6 5 3 3 4 4 4 7 Construct a risk matrix and identify what you would consider to be critical, monitor and ignore threats. Explain your reasoning.arrow_forwardGiven the information below, estimate the probability that the noncritical path B-C-G will take more than 15 weeks. Hint: Subtract from 1.0 the probability that B-C-G will take 15 weeks or less. Refer to the standard normal table. Question Viewer Activity Expected Time (weeks) Variance A 4.0 1.00 B 5.5 0.96 C 4.0 0.15 D 11.5 1.52 E 6.5 2.40 F 8.5 2.55 G 5.0 0.69 The probability that this path will take more than 15 weeks to complete is ☐. (Enter your response rounded to four decimal places.)arrow_forwardBased on project information on kitchen space renovation as prepared below, fil in the time estimates (t, activity variances (v) and answer all questions: Activity Predecessor Time Estimates (in weeks) Optimistic Most Likely Pessimistic a m 10 11 A. 10 18 A 13 15 A E 2 D 7 B, C (1) Construct the AOA node network. (i) Construct the AON node configuration network. (i) Based on the AON node configuration network above, fil the information in the table as provided below: Activity Early Start Early Finish Latest Start Latest Finish Slack A G (v) Determine the project's completion time. (v) Determine the critical path af the project. (vi) Determine the probability that the project will be completed in 23 weeks, 25 weeks and 27 weeks.arrow_forward
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