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General Hospital A+




Question;General Hospital, a not-for-profit acute care facility, has the;following cost structure for its inpatient services:?Fixed costs;$10,000,000?Variable cost per inpatient days $200?Charge (revenue) per;inpatient day $1,000?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 wants a 25 percent;discount from charges. Should the hospital agree to the discount;proposal?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 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.?Furthermore, assume that the;clinic must pay taxes at a 30 percent rate.?a. Construct the clinic?s;projected P&L statement.?b. What number of visits is required to;break even??c. What number of visits is required to provide you with an;after tax-profit of $100,000?


Paper#51593 | Written in 18-Jul-2015

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