User Account

All Pages

What is the expected rate of return on the project

Assignment Help Financial Accounting
Reference no:

1. Consider the following balance sheet:

611_Balance sheet problem.png


a. How does this balance sheet differ from the one presented in your textbook Table 4.1 for Sunnyvale?
b. What is Best Care's net working capital for 2007?
c. What is Best Care's debt ratio? How does it compare with Sunnyvale's debt ratio?

2. You are considering starting a walk-in-clinic. Your financial projections for the first year of operations are as follows:

745_Balance sheet problem1.png

Assume that all costs are fixed, except supply costs, which are variable. Furthermore, assume that the clinic must pay taxes at a 30% rate.
a. Construct the clinic's projected P&L statement.
b. What number of visits is required to break even?
c. What number of visits is required to provide you with an after-tax profit of $100,000?

3. Assume that a primary care physician practice performs only physical examinations. However, there are three levels of examinations I, II, III - that vary in depth and complexity.

An RVU analysis indicates that a Level I examination requires 10 RVUs , a Level II exam 20 RVUs, and a Level III exam 30 RVUs. The total costs to run the practice, including a diagnostic laboratory, amount to $500,000 annually, and the numbers of examinations administered annually are 2,400 Level I, 800 Level II, and 400 Level III.

a. Using the RVU methodology, what is the estimated cost per type of examination?
b. If the goal of the practice is to earn a 20% profit margin on each examination, how should the examinations be priced?

4. Consider the following 2007 data for Newark General Hospital (in millions of dollars):

441_Balance sheet problem2.png

a. Calculate and interpret the profit variance.
b. Calculate and interpret the revenue variance.
c. Calculate and interpret the cost variance.
d. Calculate and interpret the volume and price variances on the revenue side.
e. Calculate and interpret the volume and management variances on the cost side.
f. How are the variances calculated above related?

5. Consider the following probability distribution of returns estimated for a proposed project that involves a new ultrasound machine:

43_Balance sheet problem3.png

a. What is the expected rate of return on the project?
b. What is the project's standard deviation of returns?
c. What is the project's coefficient of variation (CV) of returns?
d. What type of risk does the standard deviation and CV measure?
e. In what situation is the risk relevant?

Reference no:

Questions Cloud

What risks exist for dan at this point : What risks exist for Dan at this point? How does this relate to what you learned in our negotiating assignment?
State the balanced chemical equation for the reaction : What is the balanced chemical equation for its reaction with nitric acid? Write the balanced chemical equation for its reaction with a potassium hydroxide.
Employee-related tasks : What have been the primary reason for the growth in the number of necessary employee-related tasks over the past four to five decades.
Find the component of q at p in the direction of pt : (a) Determine a unit vector in the direction of Q at P(1, 2, 1) (b) Find the component of Q at P in the direction of PT where T is point (5, 3, -4) (c) Where is Q the same as the unit vector of  \(a_{x}+11a_{y}+10a_{z}\)
What is the expected rate of return on the project : What is the expected rate of return on the project and what is the project's standard deviation of returns - calculate and interpret the volume and price variances on the revenue side.
Explain at least three ethical issues : Explain at least three ethical issues within today’s business environment that affect your community and organization.
Explain expression for the vibrational heat capacity : Molecular solid can be pictured as the collection of independent harmonic oscillators. (a) Starting with the expression for the partition function derive an expression for the vibrational heat capacity
What is the design capacity of a production system : What is the design capacity of a production system that produces 753 good units a year with a utalization of 90% and yield of 85%?
Determine what is the minimum height h of bin : A tooling designer is designing a jig that will insert pins into the flip-up handles of a coffeemaker. The bin to hold the pins should hold enough pins for 3 hours' work before reloading. The engineering estimate for the rate of inserting the pins..

Reviews

Write a Review

Financial Accounting Questions & Answers

  What was balance in eve prepaid insurance

The liability policy was $63,000 for eighteen-months, and the crop damage policy was $24,000 for a two-year term. What was the balance in Eve's prepaid insurance as of December 31, 2012?

  Explain how much should record as amortization expense

On Jan 5, 2011, the company determined that the copyright would expire at the end of 2016. Explain how much should the co. record as amortization expense for copyright for 2011?

  Illustrate what was the original cost of the copier to john

Assuming the computer has an eleven-year life and will have no salvage value atthe expiration of the lease, illustrate what was the original cost of the copier to John? (b) What amountwould each payment be if the 11 annual payments are to be made ..

  Determine expected cash collections by month

The company is in the process of preparing a cash budget and must determine expected cash collections by month. To this end, the following information has been assembled:

  Primary comparative financial statements

Based upon your analysis in part a, does teh company's liquidity appear to have increased or decreased during the most recent fiscal year?

  Prepare the sales portion of the entry for this sale

Prepare the sales portion of the entry for this sale on Randy's books and Prepare the cost of sales portion of the entry for this sale on Randy's books.

  Illustrate what might this indicate

An examination of the cost records of the Williams Furniture Company reveals that the materials price variance is favorable but the materials quantity variance is unfavorable by a substantial amount. Illustrate what might this indicate?

  Prepare a bank reconciliation as of may

All checks written by the company had been processed by the ank by May 31 and were listed on the bank statement except for checks totaling $1,890.0. Prepare a bank reconciliation as of May 31, 2011.

  What should be the cash price today for the car

If you know that the company charges 26% interest on outstanding balances what should be the cash price, today, for the car?

  Purpose all the journal entries for the above transactions

Purpose all the journal entries for the above transactions for 1 st July 2010 to 30 June 2011.

  What do you meant by the term liability management

What do you meant by the term liability management?  Discuss the instruments that banks use in liability management.  What are the advantages and potential pitfalls of aggressive use of liability management for commercial banks?

  Evaluate the acquisition cost of each intangible asset

Reporting and Computing the Acquisition and Amortization of three Different Intangible Assets - Evaluate the acquisition cost of each intangible asset

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!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

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