You are considering starting a walk-in clinic. Your financial projections for the first year ofoperations are as follows:Revenue (10000 visits) $394,007Wages and benefit$226,585Rent$4,095Depreciation$29,179Utilities$2,164Medical supplies$49,632Administrative supplies$9,163Assume that all costs are fixed, except supply costs, which are variable. Furthermore, assumethat the clinic must pay taxes at a 31 percent rate. What number of visits is required toprovide you with an after-tax profit of $108,247?[Hint: Remember that after-tax profit = before-tax profit * (1- tax rate).](Do not round intermediate calculations. Round your final answer to 2 decimal places. Forexample, 12.3456 should be entered as 12.35. REMINDER: quantities are always roundedUP. Canvas does not have this capability.)

Answered: Image /qna-images/answer/1403d487-31d9-436d-b398-0caac8dd044f.jpg

Answered: You are considering starting a walk-in…

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter3: Cost Behavior And Cost Forecasting

Section: Chapter Questions

Problem 36E

See similar textbooks

Similar questions

Keating Hospital is considering two different low-field MRI systems: the Clearlook System and the Goodview System. The projected annual revenues, annual costs, capital outlays, and project life for each system (in after-tax cash flows) are as follows: Assume that the cost of capital for the company is 8 percent. Required: 1. Calculate the NPV for the Clearlook System. 2. Calculate the NPV for the Goodview System. Which MRI system would be chosen? 3. What if Keating Hospital wants to know why IRR is not being used for the investment analysis? Calculate the IRR for each project and explain why it is not suitable for choosing among mutually exclusive investments.
You are considering starting a walk-in clinic. Your financial projections for the first year of operations are as follows: Revenue (10000 visits) $405,041 Wages and benefit $236,502 Rent $4,415 Depreciation $27,780 Utilities $2,845 Medical supplies $46,208 Administrative supplies $9,302 Assume that all costs are fixed, except supply costs, which are variable. Furthermore, assume that the clinic must pay taxes at a 30 percent rate. What number of visits is required to break even?
The hospital where you are employed is continuing with their analysis with the goal of opening a walk-in clinic. After conducting additional research, the financial projections for the first year of operations are as follows: Revenues (from 10,000 visits): $400,000 Wages and benefits: $220,000 Rent: $5,000 Depreciation: $30,000 Utilities: $2,500 Medical supplies: $50,000 Administrative supplies: $10,000 Assume that all costs are fixed except supply costs, which are variable. Assume that the clinic will be required to pay taxes at a 30% tax rate. Respond to the following questions. Be sure to show your work for all calculations. Prepare the clinic’s projected Profit and Loss (P&L) Statement. (8 points) What number of visits is required to break even? (3 points) What number of visits is required to provide you with an after-tax profit of $100,000? (4 points)
An outpatient clinic invests $3,300,000. The desired ROI is 12%. In the first year, revenues are $1,750,000 and expenses are $1,270,000. Calculate the ROI from this investment. Does the clinic meet its ROI requirement that year? You will answer YES or NO
The management of a private hospital is considering automating some back office functions. This would replace five personnel that currently cover three shifts per day, 365 days per year. Each person earns $35,000 per year. Company-paid benefits and overhead are 45% of wages. Money costs 8% after income taxes. Combined federal and state income taxes are 28%. Annual property taxes and maintenance are and 4% of investment, respectively. Depreciation is 15-year straight line. Disregarding inflation, how large an investment in the automation project can be economically justified?
Below are the projected revenues and expenses for a new clinical nurse specialist program being established by a hospital. Nurses would provide education while the patient is in the hospital and home visits after patient discharge on a fee-for-service basis. Should the hospital undertake the program if its required rate of return is 12%? Year 1 Year 2 Year 3 Year 4 Total Revenue costs 100,000 150,000 200,000 250,000 700,000 150,000 150,000 150,000 150,000 600,000 (50,000) 0 50,000 100,000 100,000
General Hospital, a not-for-profit acute care facility, has the following cost structure for its inpatient services Fixed $10,000,000 Variable cost per inpatient day 200 Charge (revenue) per inpatient day 1000 The hospital expects to have a patient load of 15,000 inpatient days next year. a. Construct the hospital’s base case projected P&L statement. b. What is the hospital’s breakeven point? c. What volume is required to provide a profit of $1,000,000? A profit of $500,000? d. Now, assume that 20 percent of the hospital’s inpatient days come from a managed care plan that requests a 25 percent discount from charges. Should the hospital agree to the discount proposal?
3. St Barnabas Hospital is opening a satellite office. Your financial projections for the first year of operations are as follows:Revenues (10,000) $500,000Wages and Benefits $350,000Rent 8,000Depreciation 50,000Utilities 4,500Medical Supplies 70,000Administrative Supplies 20,000Assume that all cost are fixed except supply costs, which are variable. Furthermore, assume that the clinic must pay taxes at a 30 percent rate.a. Construct the clinics projected P & L statement.Insert your response here. b. What number of visit is required to break-even?Insert your response here. c. What number of visits is required to provide you with an after-tax profit of $100,000?Insert your response here.
A not-for-profit hospital realizes a 3 percent return on its $200,000 investment in its home health unit. Its current revenue after discounts and allowances is $382,000. Administrative costs are $119,000, clinical personnel costs are $210,000, and supply costs are $47,000. Providing home health care is not a core goal of the hospital, and it will sell the home health unit if it cannot realize a return of at least 12 percent. A process improvement team has recommended changes to the home health unit's billing processes. The team has concluded that these changes could reduce costs by $20,000 and increase revenues by $5,000. Analyze the data that follow and assess whether the changes would make the home health unit profitable enough to keep. Old New Revenue 382,000 387,000 Cost 376,000 356,000 Profit…
A hospital germ-fighting and floor cleaning robot, named Maurice, costs $104,000. Patients are billed $1 per day for Maurice’s use and upkeep. A certain 300-bed hospital is considering purchasing this robot. What is the simple payback period for Maurice? What assumptions did you make?
San Juan Health Department's dental clinic projects the following costs and rates for the year 20XX.Total fixed costs: $225,000Variable costs: $60 per patientCharges: $250 per patient Using the information above, determine the break-even point in patients? Using the information above, determine the break-even point in dollars? If the clinic decided it would like to make a profit of $8,000, what is the new break-even point in patients? If the clinic decided it would like to make a profit of $8,000 at 1,226 patients, what is the new break-even point in dollars?
The hospital is considering the purchase of imaging equipment worth $25,000 to improve its visual capture results, and improve outcomes. The operating costs will be reduced by $7,000 per year. The computer has an estimated life expectancy of 5 years, and an estimated salvage value of $5,000. What is the profitability index if the discount rate is 8%. Ignore reimbursement considerations.

SEE MORE QUESTIONS

Recommended textbooks for you

Managerial Accounting: The Cornerstone of Busines…

Accounting

ISBN:

9781337115773

Author:

Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:

Cengage Learning

Cornerstones of Cost Management (Cornerstones Ser…

Accounting

ISBN:

9781305970663

Author:

Don R. Hansen, Maryanne M. Mowen

Publisher:

Cengage Learning

Managerial Accounting: The Cornerstone of Busines…

Accounting

ISBN:

9781337115773

Author:

Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:

Cengage Learning

Cornerstones of Cost Management (Cornerstones Ser…

Accounting

ISBN:

9781305970663

Author:

Don R. Hansen, Maryanne M. Mowen

Publisher:

Cengage Learning

SEE MORE TEXTBOOKS