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St. Elsewhere is considering opening an outpatient clinic for patients who have minor injuries or illnesses. The clinic will be open 24 hours a day, 7 days per week; the hospital expects 20,000 patient visits in the first year. The financial projections for year 1 of operations are below:

Average Revenue per Patient  $200 per patient

Wages and Benefits  $1 million

Average Medical Supplies Used per Patient  $30 per patient

Interest  $300,000

Depreciation  $200,000

Utilities  $30,000 per month

Miscellaneous  $200,000

(A) What is the breakeven volume required for the project? $

(B) What is the required volume for the project to generate an estimated $250,000 profit? $

(C) What is the maximum the project can spend on medical supplies per patient to breakeven (profit = $0), assuming 20,000 visits? $

Financial Management, Finance

  • Category:- Financial Management
  • Reference No.:- M92689633

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