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?
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?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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
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?
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