1. Business expansion Suppose that you operate a nurse-nunaged clinic and are considen'ng extending the hours of operation into the evenings to enable you to see more patients. If you do so, it will add to expense but also to revenue, since the patients seen are eligible for third-party reimbtnsement. The income statement of the organization appears below. In the right hand column are projected income and expenses if the expansion is implemented. Note that the expansion involves a drop in revenue per visit because it entails seeing patients with lower reimbursement. The average reinbmsement falls from $50 ($287,500/5,750) to $48 ($414,000/8,625) as a result of the expansion. Questions: Show your work! a. What is the marginal cost per visit of catering to the additional visits? b. What is the marginal revenue per visit of catering to the additional visits? 0. On a purely economic basis, does it make sense to expand the clinic? Why or why not? Before Expansion After Expansion (estimates) Billable Patient Visits 5750 8625 Revenue $ 287,500 $ 414,000 Expenses $ 285,262 $ 399,851 Nurse Salaries $ 120,031 $ 180,047 Support Staff Salaries $ 75,296 $ 100,000 Support Staff Benefits :5 15,3 53 :5 21,3 53 Information Services $ 5,003 $ 7,503 Laboratory at 8,625 $ 12,938 Imaging $ 2,214 $ 3,321 Medical Supplies $ 10,666 $ 15,999 Building and Occupancy 3; 20,873 $ 20,873 Furniture and Equipment $ 3,968 $ 3,968 Admnistrative Services $ 6,268 $ 6,268 Insurance Premiums $ 5,175 $ 5,175 Outside Professional Fees $ 2,614 $ 2,614 Promotion and Marketing 3; 2,150 $ 5,300 Other Interes $ 719 $ 719 Health, Business and Propertu Taxes :5 776 $ 776 Recruiting $ 2,800 $ 8,900 Other Ograting Expenses $ 2,731 $ 4,097 Net Income $ 2,238 $ 14,149