A surgery center specializes in high-risk cardiovascular surgery. The center needs to forecast its profitability over the next three years to plan for capital growth projects. For the first year, the hospital anticipates serving 1,300 patients, which is expected to grow by 9% per year. Based on current reimbursement formulas, each patient provides an average billing of $130,000, which will grow by 4% each year. However, because of managed care, the center collects only 25% of billings. Variable costs for supplies and drugs are calculated to be 10% of billings. Fixed costs for salaries, utilities, and so on will amount to $20,000,000 in the first year and are assumed to increase by 6% per year. Develop a spreadsheet model to predict the net present value of profit over the next three years. Use a discount rate of 4% Complete the accompanying spreadsheet model for the costs in Year 1. D E F G H I % (Type whole numbers.) A B 1 Collection % 2 Variable Cost % 3 Discount Rate 4 5 Growth Rates % % % % 6 Patients Served Average Billing Fixed Costs Total Costs Total Profit Collected Amount =B7*C7 Variable Costs =C7*C2 Total Collected =B7*D7 7 Year 1 $ $ =E7*B7+F7 =G7-H7 A surgery center specializes in high-risk cardiovascular surgery. The center needs to forecast its profitability over the next three years to plan for capital growth projects. For the first year, the hospital anticipates serving 1,300 patients, which is expected to grow by 9% per year. Based on current reimbursement formulas, each patient provides an average billing of $130,000, which will grow by 4% each year. However, because of managed care, the center collects only 25% of billings. Variable costs for supplies and drugs are calculated to be 10% of billings. Fixed costs for salaries, utilities, and so on will amount to $20,000,000 in the first year and are assumed to increase by 6% per year. Develop a spreadsheet model to predict the net present value of profit over the next three years. Use a discount rate of 4% Complete the accompanying spreadsheet model for the costs in Year 1. D E F G H I % (Type whole numbers.) A B 1 Collection % 2 Variable Cost % 3 Discount Rate 4 5 Growth Rates % % % % 6 Patients Served Average Billing Fixed Costs Total Costs Total Profit Collected Amount =B7*C7 Variable Costs =C7*C2 Total Collected =B7*D7 7 Year 1 $ $ =E7*B7+F7 =G7-H7