Essay on Healthcare Finance

1236 Words Apr 15th, 2012 5 Pages
Student name
Healthcare Finance course code
April 28, 2011

Healthcare Finance
Problem 5.1
Break-even analysis helps to plan and control business by showing break-even point, net profit and net loss areas. As it is mentioned in the graph below, on the break-even point cost is equal to revenue which means there is neither loss nor profit at the intersection of sales line and cost line (Frongello).

a) As two graphs are provided in the question; the horizontal line shows the fixed cost where the two semi-vertical (upright) lines show variable cost and sales, respectively. Provider B has greater fixed cost than provider A because B’s fixed cost line is higher than A’s; therefore, provider B has
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Revenue*Volume = pre-tax profit + fixed cost+ variable cost *volume
Therefore Volume= (pre-tax profit + fixed cost) / (selling
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