**Mayo Clinic Overview****History and Expansion:**- **1889:** Founded in Rochester, MN- **1987:** Expanded to Jacksonville, FL- **2016:** Over 50,000 employees- **2018:** More than a million patients**About Mayo Clinic:**The Mayo Clinic is the world's largest integrated, not-for-profit medical group practice, with main facilities in Minnesota, Arizona, and Florida. It is recognized as one of the leading hospitals globally. The clinic’s mission is focused on people:*To inspire hope and contribute to health and well-being by providing the best care to every patient through integrated clinical practice, education, and research.***Case Study: Darnell Johnson**After obtaining a two-year degree in radiation therapy and accumulating three years of experience at a small hospital, Darnell Johnson began working at the Mayo Clinic with a salary of $63,500. The clinic contributes 6% of his salary to his retirement plan and allows him to contribute an additional 5% of his salary.**Exercises:**1. **Retirement Contribution Calculation:** - Johnson decides to put 5% of his salary into his retirement plan in addition to the contribution by his employer. Find the total annual contribution into the retirement plan.2. **Investment Growth Estimation:** - Johnson decides to invest his retirement funds in a mutual fund with global stocks expected to yield 8% per year. Calculate the future value in his account after 12 years.3. **Annual Payroll Estimation:** - Assume the Mayo Clinic has exactly 55,000 employees, with the average salary per person, including physicians, being $87,300 per year (including health insurance costs). Estimate the annual payroll. ### Exercises on Financial Contributions and Calculations4. **Calculate Annual Contributions:** - Use the annual payroll to estimate the annual contribution the Mayo Clinic must make into: - (a) FICA (Social Security) and Medicare, which is 7.65% of all wages. - (b) The retirement plans of all employees. - **Answer Spaces:** - (a) ____________________ - (b) ____________________5. **Determine Total Labor Costs:** - (a) Find the total labor costs by adding the amounts in Exercises 3 and 4 above. - (b) Write the number using words. It is evident that the Mayo Clinic requires a substantial amount of revenue to pay employees, not considering the costs of buildings, equipment, supplies, etc. - **Answer Spaces:** - (a) ____________________ - (b) ____________________6. **Calculate Present Value of a Donation:** - The Mayo Clinic saved the life of a wealthy entrepreneur who had cancer. He decided to donate $400,000 per year for the next 5 years to the hospital. Find the present value of this gift, assuming a 6% interest rate per year. - **Answer Space:** - 6. ____________________7. **Funding for New Building:** - Managers have decided to build a new building in 7 years and will need $47,400,000. The chief financial officer (CFO) decides to fund this cost by making contributions into a sinking fund at the end of each 6-month period. Find the payment needed every 6 months if the funds earn a 5% interest rate per year. - **Answer Space:** - 7. ____________________

WE ARE ALLOWED TO DO THE FIRST THREE SUB-PARTS ONLY. THE ANSWER IS AS BELOW:

Answered: 1. Johnson decides to put 5% of his…

Practical Management Science

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Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter2: Introduction To Spreadsheet Modeling

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Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...

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