Reference no: EM132577732

Question 1. Your firm has $45.0 million invested in accounts receivable, which is 90 days of net revenues. If this value could be reduced to 50 days, what annual increase in income would your firm realize if the increase in cash could be invested at 7.5 percent?

You have been asked to establish a pricing structure for radiology on a per-procedure basis. Present budgetary data is presented below:

Number of Budgeted Procedures     10,000

Budgeted Cost                        $400,000

Desired Profit                           $ 80,000

It is estimated that Medicare patients comprise 40 percent of total radiology volume and will pay on average $38.00 per procedure. Approximately 10 percent of the patients are cost payers. The remaining charge payers are summarized below:

Payer                       Volume %                 Discount %

Blue Cross                        20                         4

Unity                               15                        10

Kaiser                              10                        10

Self-Pay                           5                         40

                                     50%