What is the breakeven volume required for the project

Assignment Help Financial Management

Reference no: EM131861279

St. Elsewhere is considering opening an outpatient clinic for patients who have minor injuries or illnesses. The clinic will be open 24 hours a day, 7 days per week; the hospital expects 20,000 patient visits in the first year. The financial projections for year 1 of operations are below:

Average Revenue per Patient $200 per patient

Wages and Benefits $1 million

Average Medical Supplies Used per Patient $30 per patient

Interest $300,000

Depreciation $200,000

Utilities $30,000 per month

Miscellaneous $200,000

(A) What is the breakeven volume required for the project? $

(B) What is the required volume for the project to generate an estimated $250,000 profit? $

(C) What is the maximum the project can spend on medical supplies per patient to breakeven (profit = $0), assuming 20,000 visits? $

Reference no: EM131861279

Questions Cloud

Relationships for fixed-rate financial assets : Use the information to verify the three principles of interest rate-price relationships for fixed-rate financial assets.

Stock will pay cash dividend : ABC Co's stock will pay a cash dividend of $3.50 next year. After that, the dividends are expected to increase indefinitely at 4% per year.

What are expected cash collections in months : What are expected cash collections in months 3 and 4?

Completed an initial public offering : Moonscape has just completed an initial public offering. What were flotation costs as a fraction of funds raised?

What is the breakeven volume required for the project : St. Elsewhere is considering opening an outpatient clinic for patients who have minor injuries or illnesses. What is breakeven volume required for the project.

The company has majority voting : What is the minimum number of shares you need to own to ensure that you can elect at least one director if the company has majority voting?

What is the design utilization : C&A clinic has a design capacity of 60 patients per hour and an effective capacity of 40 patients per hour. What is the design utilization (in %)?

What amount of the record keeping is allocated to cleaning : St. Payne Med Center is using the step-down method to allocate costs. What amount of the Record Keeping is allocated to Cleaning?

How would you determine the value of this product : How would you determine the value of this product? What price do you think Compressor Controls should charge for this product?

User Account

All Pages