Mountain Village Clinic: Analyze and discuss the following:

If you were to recommend a credit line amount to seek from First Bank, consider what additional information about the business you would want to have and explain why. Based on your analysis, how large a credit line would you recommend the clinic seek from First Bank? In your opinion, what are three key learning points from this case?

The clinic pays fixed general and administrative expenses of $52,000 per month.

The clinic has a semi-annual five-year, 10%, $500,000 term loan.

The clinic plans to purchase an x-ray machine costing $125,000.

The clinic has to maintain a minimum cash balance of $50,000 at the bank.

Clinical labor costs is $150,000 per month (December through March), and $120,000 per month in the remaining months

Billing forecast:

November $150,000

December $ 250,000

January $350,00

February$450,000

March $350,000

April $150,000

May $100,000

June $175,000

July $ 250,000

August $200,000