Calculate the break-even point

Assignment Help Financial Accounting
Reference no: EM132902515

Question - You are attempting to develop a break-even scenario for a capitation contract with a major HMO. Your hospital has agreed to provide all inpatient services for 10,000 covered lives. You will receive $450 per member per month (PMPM) to cover all inpatient services. It is anticipated that 99 admissions per 1000 covered lives will be provided with an average length of stay of 5.0 days, or 495 days per 1000.

You anticipate that your hospital will incur fixed costs, or readiness to serve costs, of $ 36,000,000 for these 10,000 covered lives. Variable costs per patient day are expected to be $ 3600.

A) Calculate the break-even point, in patient days, under this contract.

B) If the costs, revenues, length of stay and anticipated admissions do not change, does this proposal meet your target of breaking even or better and why?

Reference no: EM132902515

Questions Cloud

How much will need to invest today to be able : The stated interest rate is 6% (APR). If interest is compounded monthly, how much will you need to invest today to be able to make your down payment?
Prepare journal entries : On October 1, 2020, Yost Company purchased 4,000 of tb P1,000 face amount, Prepare journal entries for 2020 and 2021
Determine the maximum would be willing to pay : If alternative investments of similar risk earn 3.64% per year, determine the maximum you would be willing to pay for this investment.
Prepare an income statement for kissick co : Prepare an income statement (ignoring income taxes) for Kissick Co.'s first year of operations and a balance sheet as of the end of the year.
Calculate the break-even point : You will receive $450 per member per month (PMPM) to cover all inpatient services. Calculate the break-even point
Discuss the differences between inventory and fixed assets : Discuss the differences between inventory and fixed assets. Are the characteristics the same and What would you do in this case
What is the NPV of the best case scenario : Evaluate the purchase of an existing 1050 unit apartment complex for $15000000, What is the NPV of the best case scenario
Calculate the profit on the futures contract : At the beginning of the quarter, you purchased a $400,000. Calculate the profit on the futures contract if the price at the end of the quarter is 108.25.
Analyze the business-level strategies : Analyze the business-level strategies for the corporation you chose to determine the business-level strategy you think is most important to the long-term succes

Reviews

Write a Review

Financial Accounting Questions & Answers

  Financial statement analysis and preparation

Financial Statement Analysis and Preparation

  Shareholder of a company

Describe the ways that a person can become a shareholder of a company. Why Wal-Mart would split its stock?

  Financial and accounting principles

An understanding of financial and accounting principles can be a valuable tool for managers. While not all managers will find themselves calculating financial ratios or preparing annual financial data.

  Prepare a statement of cash flow using the direct method

Prepare a Statement of Cash Flow using the Direct Method and Prepare the Operations section of the Statement of Cash Flow using the Indirect Method.

  Financial accounting assignment

This assignment has one case study and two question apart from case study. Questions related to document Liquidation question and Company financial statements question - Torquay Limited

  Prepare general journal entries for goela

Prepare general journal entries for Goela Ltd

  Principles of financial accounting

Prepare the journal entry to record the acquisition of the assets.

  Prepare general journal entries to record the transactions

Prepare general journal entries to record the transactions, assuming use of the periodic inventory system

  Global reporting initiative

Compare the view espoused by the economist Milton Friedman about the social responsibilities of business with the views express by Stigler.

  Explain the iasb conceptual frameworks

Explain the IASB Conceptual Framework's perspective of users and their decisions.

  Determine the company''s financial statements

T he focus of the report is to determine the extent to which you are comfortable relying on the financial statements as presented by management .

  Computation of free cash flow

Computation of Free Cash Flow

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