BEACHSIDE HEALTH PARTNERS
	Joint Venture Analysis
This case considers the financial analysis of a joint venture involving both taxable and nontaxable
general partners as well as taxable limited partners.
The model generates the partnership's forecasted cash flow statements, distributions, and each
participant's profitability. Note that the model extends out to Column G. Also note that the
analysis focuses on cash flows to the two classes of equityholders.
The model consists of a complete base case analysisno changes need to be made to the
existing MODEL-GENERATED DATA section. However, all values in the student version
INPUT DATA section have been replaced with zeros. Thus, students must determine
the appropriate input values and enter them into the model. These cells are colored red.
When this is done, any error cells will be corrected and the base case solution will appear.
Note that the model does not contain any risk analyses, so students will have to create
their own if required by the case. Furthermore, students must create their own graphics
(charts) as needed to present their results.
Note that the Instructor Version has a short scenario analysis section, while the student version
does not. Both versions contain a separate worksheet that helps in converting scenario analysis
data into an expected value, standard deviation, and coefficient of variation.
INPUT DATA:			KEY OUTPUT:
Capital Contributions:					IRR
Group		$300,000	Hospital		66.6%
Hospital		200,000	Group		66.6%
Limited partners			Limited partners		#NUM!
Bank loan
		$500,000			NPV
Capital Costs:			Hospital		$153,012
			Group		$229,518
General partners cost of equity		30.0%	Limited partners:
Limited partners cost of equity		70.0%	Total		$670,610
Bank loan rate		8.0%	Per partner		#DIV/0!
Utilization Data:
Weeks usage per year		50
Procedures per week:
Year 1		4.0
Year 2		5.0
Year 3		4.0
Year 4		3.0
Year 5		2.0
Operating Revenue and Cost Data:
Net revenue per procedure		$5,000
Net revenue inflation		5.0%
Supplies per procedure		$5
Supplies inflation		5.0%
Technician cost per procedure		$100
Clerical cost per procedure		$50
Salary inflation		5.0%
Rent inflation		5.0%
Insurance inflation		5.0%
Marketing inflation		5.0%
Admin expense inflation		5.0%
Group/LP eff tax rate		0.0%
Cash Flow Distribution Data:
Initial distribution to
general partners		30.0%
Final distribution to
general partners		50.0%

Develop the Partnership's annual cash flow distributions to each partner. (Treat the limited partners as a single entity.) Now, apply the tax status of each of the partners to obtain each partner's annual after-tax cash flows.