.4General Hospital, a not-for-profit acute care facility, has the following cost structure for its inpatient services: Fixed costs $10,000,000 Variable cost per inpatient day 200 Charge (revenue) per inpatient day 1,000 The hospital expects to have a patient load of 15,000 inpatient days next year. a.Construct the hospital’s base case projected P&L statement. b.What is the hospital’s breakeven point? c.What volume is required to provide a profit of $1,000,000? A profit of $500,000?
5.4General Hospital, a not-for-profit acute care facility, has the following cost structure for its inpatient services:
Fixed costs $10,000,000
Variable cost per inpatient day 200
Charge (revenue) per inpatient day 1,000
The hospital expects to have a patient load of 15,000 inpatient days next year.
a.Construct the hospital’s base case projected P&L statement.
b.What is the hospital’s breakeven point?
c.What volume is required to provide a profit of $1,000,000? A profit of $500,000?
d.Now assume that 20 percent of the hospital’s inpatient days come from a managed care plan that wants a 25 percent discount from charges. Should the hospital agree to the discount proposal?
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