Problem:

You are considering starting a walk-in-clinic. Your financial projections for the first year of operations are as follows: Revenues (10,000 visits) $400,000 Wages & 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. Furthermore, assume that the clinic must pay taxes at a 30% rate.

Requirement:

Question 1: Construct the clinic's projected P&L statement.

Question 2: What number of visits is required to break even?

Question 3: What number of visits is required to provide you with an after-tax profit of $100,00

Note: Provide support for your underlying principle.