Assess the financial implication should do and why

Assignment Help Financial Accounting
Reference no: EM132508477

Point 1: As you are aware, Medical Associates has achieved its targeted utilization and financial projections for ambulatory surgery in Jasper. It is now time to consider a similar service at our offices in Middleboro. The physical facilities needed for ambulatory surgery will cost $450,000. Our cost of capital is 4 percent and the hurdle rate is 6 percent. The anticipated salvage value of these new fixed assets will be $150,000 after five years. To accomplish this we will need to recruit two new general surgeons for our Jasper office, thereby freeing our Middleboro general surgeons to work in this new ambulatory surgical facility. We anticipate opening no earlier than January 2, 2016

Point 2: Based on operational estimates, we anticipate that this project's annual operational revenue will exceed its operational expenses (R-E) for each of the first five years in accordance with the following schedule. Note that the operational expenses include all direct costs including salaries and benefits.

Fiscal Implications of New Ambulatory Surgery Service

R-E ($) Median Cases per Day (M-F)

Year 01           20,000              9.0

Year 02          40,000             10.0

Year 03          60,000             12.5

Year 04           100,000           12.5

Year 05          140,000                14.0

Question 1: We estimate that this unit, employing the standard RVU system used in hospitals, will generate 1.1 surgical procedures per case. Assess the financial implication. Should we do this? Why?

Reference no: EM132508477

Questions Cloud

Solve the value of cogs fifo for sit down : Solve the value of COGS FIFO for Sit Down, Co. in 2017. LIFO reserve from 2016 to 2017 was a decrease in the LIFO reserve of $30.
Coal fired power plants have been major environmental : Coal fired power plants have been a major environmental blight for the last 70 years in the United States.
Concentration of an aqueous solution : 1. The concentration of an aqueous solution of I3- can be determined by a reaction with aqueous sodium thiosulfate, Na2S2O3:
The gene for spotted fur has two alleles : In a population of cats, the gene for spotted fur has two alleles. The dominant allele leads to spotted fur, and the recessive allele leads to solid-colored fur
Assess the financial implication should do and why : Employing the standard RVU system used in hospitals, will generate 1.1 surgical procedures per case. Assess the financial implication. Should we do this? Why?
Graph the phase transition heat : Given the following information, tabulate the different heat steps and graph the phase transition Heat profile using Excel going from 0 to 400 K for 1 mole
Explain why the source is a good choice : Review the sources listed below and choose the one you would use in your informative speech. Thoroughly explain why the source is a good choice.
Write equations for the acid-base reactions : Why is it better to extract twice with 15 ml portions of solvent instead of once with a 30 ml volume of solvent?
About the scientific method-about experimental design : Based on the information you've learned so far about the scientific method and more recently about experimental design,

Reviews

Write a Review

Financial Accounting Questions & Answers

  Phillips company bought 40 ownership in jones bag company

phillips company bought 40 ownership in jones bag company on 1st january 2001 at underlying book value. in 2001 2002

  About the dividends per share

Michelangelo Inc., a software development firm, has stock outstanding as follows: 30,000 shares of cumulative 4%, preferred stock of $25 par, and 38,000 shares of $75 par common. During its first four years of operations, the following amounts were d..

  How much of the net income is allocated to yolanda

avier and Yolanda have original investments of $50,000 and $100,000, respectively, in a partnership.- How much of the net income of $77,000 is allocated to Yolanda?

  What is the market risk premium

The inflation rate is 3.1%. What is the market risk premium?

  Discuss the advantages of using a perpetual inventory system

Discuss the advantages and disadvantages of using a perpetual inventory system. From the data presented in this case, is there any indication of the adequacy of inventory levels during the year?

  What is the net book value of component a after five years

What is the net book value of component A after five years? Nigeria Ltd. acquires a new machine. It is comprised of two different components

  Find out tiffany basis in the land

Tiffany remains a partner in the partnership, and the distribution is proportionate to the partners. Find out Tiffany's basis in the land, accounts receivable and TMF partnership after the distribution.

  Land buildings and machinerya company made the following

land buildings and machinery.a company made the following expenditures in connection with the construction of its new

  Prepare a 20x8 consolidated income statement

Assume that Go-med is a joint venture owned by Insure and four other venturers, that the acquisition differentials are valid, and that it has not yet adopted IFRS 11: Joint Arrangements.  Prepare a 20X8 consolidated income statement for Insure using ..

  Calculate the labor price and quantity variances

Calculate the labor price and quantity variances, assuming standard is 3.94 hours of direct labor at $12.37 per hour.

  The decision of the eighth circuit court of appeals

John is a resident of Minnesota. Her 2015 federal income tax return is currently under audit. John and the Internal Revenue Service Agent assigned to his case have resolved all issues in his case except one. If John filed a petition in tax court, is ..

  What amount should hmcc record as compensation expense

What amount should HMCC record as compensation expense for the year ended December 31, 2022, assuming HMCC chooses the option to record forfeitures

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd