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Week 1 Homework Narrative Screen s Q Search Amanda and Bartholomew, a lovely couple with degrees in medicine, own and operate a demonology clinic. The clinic is open for business Monday through Friday from 8:00 a.m. to 5:00 p.m. The thing is, many of their patients work for government or private sector and they have to take sick leaves to see the doctors during those days. Since most people do not work in weekends, Amanda and Bartholomew think they could attract many more patients if they open the clinic for 1 1. On Saturdays, Amanda teaches biochemistry in a local university for adult students, which business on Saturdays as well. This is because these patients could save some of their sick leaves. she needs to give up if they open the clinic an extra day. She makes $5,000 per month for Is this a wise economic decision? Please help this lovely couple with their economic decision. those lectures. Assume that each month has 4 weeks or 20 workdays (excluding weekends). Calculate the 12. Capital (such as the medical equipment, the HVAC system, and the furniture) lose value marginal costs and benefits for the entire month (4 Saturdays). Amanda and Bartholomew are at an estimated rate of $200 per business day (this is called depreciation). planning to open the clinic on Saturdays only for the next 5 years. This is because they want to 13. If they open the clinic for business on Saturdays, their total monthly revenue will increase make some extra cash to make the payments to the bank less burdensome (see below). Here are by $35,000 (revenue is the money received from patients before subtracting out the costs). some pertinent facts (these are the only facts to consider. Please do not confuse Amanda and Bartholomew with any other extraneous information): 1. Because of its prime location, the monthly rent on the clinic is $7,000, regardless of the Incorrect Question 1 0/1 pt number of days the clinic is open for business. This rent will remain constant for the next five years. 2. They pay $4.000 per month to a local bank for a loan they took out a while back to buy some state-of-the-art medical equipment. This payment will continue for the next five Consider the information in the file named HW 1 Amanda and years. Bartholomew (Canvas Folder: Files/Homework Files/Homework 3. They pay a fixed monthly insurance premium of $3,000 for theft, fire, and things like that. 1 Files). 4. They pay a base liability (malpractice) insurance premium of $5,000 per month that excludes weekend practices. The explicit monthly fixed cost with respect to the couple's 5. For each Saturday that the clinic is open for business, the couple have to pay an additional $600 in liability insurance premium. decision to open the clinic on Saturdays is 191800.00 Instead of running their own medical business, Amanda and Bartholomew could work for a well-known and well-respected health management organization (HMO) for a combined dollars. monthly salary of $65,000 (yes, you read it right). 7. Five years ago, they installed new heating, ventilation, and air-conditioning (HVAC) Recall: Fixed cost will be incurred on a monthly basis whether or system with special filters for $15,000. Now it is worth only $3,000 in the second-hand not the couple open the clinic on Saturdays. market. 8. Two years ago, they bought new furniture for the waiting room for $12,000. It is now worth only $5,000 Answer 1: 9. For each day that the clinic is open for business, they have to pay $7,000 in wages and salaries to their staff (the receptionist and technicians). 191800.00 10. The cost of electricity and natural gas for cooling and heating, as well as the water bill is $200 per workday