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Problem - You are thinking about opening a new clinic in your home town. Your financial projections for the first year of operations are as follows:
Sales (10,000 visits) 500,000
Wages 220,000 fixed
Rent 5,000 fixed
Depreciation 30,000 fixed
Utilities 2,500 fixed
Supplies 50,000 variable
Assume a tax rate of 21%.
Required -
1. Prepare an internal Income Statement.
2. Calculate Break-Even in units and in Sales Dollars.
3. What number of visits is required to provide a target of $100,000 before tax?
4. What number of visits is required to provide a target of $100,000 after tax?
5. Calculate the degree of operating leverage?
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