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Dr. Jones is interested in expanding his practice




Question;Dr. Jones is interested in expanding his practice by adding a piece of;radiology equipment. The basic cost of the equipment would be $79,000 for the;first year. The monthly loan cost for this equipment is $1,564.29 for five;years. Additionally Dr. Jones will have to factor in the cost to hire a;radiology tech with a predicted $39,600 annual salary (this includes all taxes;and fringe benefits).;The office already has a radiology room so there is no fixed costs associated;with this purchase. You help Dr. Jones determine that the office will do 1100;studies per year with an average reimbursement of $51.63. The variable cost per;study is $3.24. Using the standard pro forma sheet, is this a good purchase?;Dr. Jones? office has purchased the above equipment. It is now Year #2;and there is a $7,000 annual maintenance fee that needs to be added to the;costs of the equipment. The variable cost is now $3.37 per study but Dr. Jones?;office is planning on doing 1675 studies because there has been an addition of;two new managed contracts and there has been a reimbursement increase to $53.16;What is the profit or loss this year? Looking at the two years together;was this a good purchase?;Part #3;Using the information in Part #1 and #2, calculate the standard pro;forma sheet years #3 through year #6.;The changes to be considered in your calculations arethe following Year #3;Variable Costs $3.43;Staff Costs $40,500;# of Estimated Studies 1750;Reimbursement $54.26;Year #4;Variable Costs $3.68;Staff Costs $40,500;# of Estimated Studies 1800;Reimbursement $54.99;Year #5;Variable Costs $3.83;Staff Costs $41,500;# of Estimated Studies 1850;Reimbursement $55.33;Year #6;Variable Costs $3.97;Staff Costs $42,000;# of Estimated Studies 1900;Reimbursement $56.00


Paper#37348 | Written in 18-Jul-2015

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