need 5.6 help, not 5.5. the information is just in 5.5
Revenues (10,000 visits) Wages and benefits Rent Depreciation Utilities Medical supplies Administrative supplies Assume that all costs are fixed cycent $400,000 220,000 5,000 30,000 2,500 50,000 10,000 5.6 (Hint: The concept of operating leverage, reviewed in this problem, is covered in the Chapter 5 Supplement.) Review the walk-in clinic data presented in Problem 5.5. Construct projected P&L statements at volume levels of 8,000, 9,000, 10,000, 11,000, and 12,000 visits. a. Assume that the base case forecast is 10,000 visits. What is the clinic's degree of operating leverage (DOL) at this volume level? Confirm the net incomes at the other volume levels using the DOL combined with the percent changes in volume. b. Now assume that the base case volume is 9,000 visits. What is the DOL at this volume? 5.5 You are considering starting a walk-in clinic. Your financial projections for the first year of operations are as follows: Revenues (10,000 visits) $400,000 Wages and benefits 220,000 Rent 5,000 Depreciation 30,000 Utilities 2,500 Medical supplies 50,000 Administrative supplies 10,000 Assume that all costs are fixed, except supply costs, which are vari- able. Furthermore, assume that the clinic must pay taxes at a 30 per- cent rate. a. Construct the clinic's projected P&L statement. b. What number of visits is required to break even? c. What number of visits is required to provide you with an after-tax profit of $100,000? 5.6 (Hint: The concept of operating leverage, reviewed in this problem, is covered in the Chapter 5 Supplement.) Review the walk-in clinic data presented in Problem 5.5. Construct projected P&L statements at volume levels of 8,000,9,000, 10,000, 11,000, and 12,000 visits. a. Assume that the base case forecast is 10,000 visits. What is the clinic's degree of operating leverage (DOL) at this volume level? Confirm the net incomes at the other volume levels using the DOL combined with the percent changes in volume. b. Now assume that the base case volume is 9,000 visits. What is the DOL at this volume