Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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7/26/2021
Content
The hospital where you are employed is continuing with their analysis with the goal of opening a walk-
in clinic. After conducting additional research, the financial projections for the first year of operations
are as follows:
• Revenues (from 10,000 visits): $400,000
Wages and benefits: $220,000
• Rent: $5,000
Depreciation: $30,000
Utilities: $2,500
• Medical supplies: $50,000
Administrative supplies: $10,000
Assume that all costs are fixed except supply costs, which are variable. Assume that the clinic will be
required to pay taxes at a 30% tax rate. Respond to the following questions. Be sure to show your
work for all calculations.
1. Prepare the clinic's projected Profit and Loss (P&L) Statement. (8 points)
2. What number of visits is required to break even? (3 points)
3. What number of visits is required to provide you with an after-tax profit of $100,000? (4 points)
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Transcribed Image Text:7/26/2021 Content The hospital where you are employed is continuing with their analysis with the goal of opening a walk- in clinic. After conducting additional research, the financial projections for the first year of operations are as follows: • Revenues (from 10,000 visits): $400,000 Wages and benefits: $220,000 • Rent: $5,000 Depreciation: $30,000 Utilities: $2,500 • Medical supplies: $50,000 Administrative supplies: $10,000 Assume that all costs are fixed except supply costs, which are variable. Assume that the clinic will be required to pay taxes at a 30% tax rate. Respond to the following questions. Be sure to show your work for all calculations. 1. Prepare the clinic's projected Profit and Loss (P&L) Statement. (8 points) 2. What number of visits is required to break even? (3 points) 3. What number of visits is required to provide you with an after-tax profit of $100,000? (4 points)
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