answer_2(10)

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Florida Atlantic University *

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301

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Marketing

Date

Feb 20, 2024

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docx

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8

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1 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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