Bakers healthcare finance Basic tools for non-financial manager sixth edition chapter 19 problem 2:
A hospital is planning to build a for-profit MRI facility to expand its imaging services to compete with other local providers. The center is expected to require a $2 million outlay in year zero to purchase the MRI and renovate the office space. The $2 million investment should be depreciated over five years. The following table provides the best case, most likely, and worst case estimates for patient quantity, reimbursement, supply and other expenses per encounter, and growing rates for patient quantity, reimbursement, and expenses beginning in year one. Position salaries are $180 for image for reading and interpretation of images. The technician and other salaries are annual salaries and benefits. Create a five year capital budget analysis and calculate the net present value and internal rate of return. In addition calculate the net present value and internal rate of return at best and worst case volume with all other variables at their most likely estimates.
$5,000. What is the primary cause of the 3. The Fleming Medical Group financial negative 540,186 net income variance? results are under budget for the first six Explain the major cause behind the months of 2022. Using the following 554,936 increase in expenses. table, calculate the volume, revenue, and cost variances for all variances greater than problems 1. A hospital is planning to build a nonprofit ungent care center next to its emergency department (ED) to siphon off nonemergent _ Case, most likely, and worst-case estimates asts designed capacity, creating patient and for patient quantity, rembursement, ts desigred capacity, creating patient and _- Supply and other expenses per that the ED will not lose any patients if the center is built due to patients leaving - beginning in yearsement, and expenses before treatment is rendered and a growing departments have 1. The ED and finance demand for ED services. The center is - center will need five physt that the expected to require a $4 million outlay in _ an average of $240.000 in satimes and year 0 No depreciation expense is needed benefits, twelve nurses at 584,000 and stnce the center is nonprofit and reaps no and nine other staff at 548,000,000 each, tax benefit. Create a five-year capital but and calculate the capital budget amalysis 286 Chapter 19 Constructing a Capital Budget and internal rate of return (IRR). In addition, calculate the NPVs and IRRs at best-and worst-case volume with all other variables at their most likely estimates. Noleces knom, ic, na + (1000) 2i-i4 thimes. 201t. $5,000. What is the primary cause of the 3. The Fleming Medical Group financial negative 540,186 net income variance? results are under budget for the first six Explain the major cause behind the months of 2022. Using the following 554,936 increase in expenses. table, calculate the volume, revenue, and cost variances for all variances greater than problems 1. A hospital is planning to build a nonprofit ungent care center next to its emergency department (ED) to siphon off nonemergent _ Case, most likely, and worst-case estimates asts designed capacity, creating patient and for patient quantity, rembursement, ts desigred capacity, creating patient and _- Supply and other expenses per that the ED will not lose any patients if the center is built due to patients leaving - beginning in yearsement, and expenses before treatment is rendered and a growing departments have 1. The ED and finance demand for ED services. The center is - center will need five physt that the expected to require a $4 million outlay in _ an average of $240.000 in satimes and year 0 No depreciation expense is needed benefits, twelve nurses at 584,000 and stnce the center is nonprofit and reaps no and nine other staff at 548,000,000 each, tax benefit. Create a five-year capital but and calculate the capital budget amalysis 286 Chapter 19 Constructing a Capital Budget and internal rate of return (IRR). In addition, calculate the NPVs and IRRs at best-and worst-case volume with all other variables at their most likely estimates. Noleces knom, ic, na + (1000) 2i-i4 thimes. 201t
