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?

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter11: Capital Budgeting Decisions

Section: Chapter Questions

Problem 5EB: A grocery store is considering the purchase of a new refrigeration unit with an Initial Investment...

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Concept explainers

Risk Management Techniques

Risk management is the procedure of recognizing, analyzing, monitoring, and preventing the risks and threatening factors of investments and business. Risks can arise from various factors including internal controls, market changes, natural disasters, and failure in productions. Risk management techniques enable entities to control and minimize the risks as well as the threatening factors of the business and it also helps to improve the business.

Question

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?

Definition Video Definition Accounting method wherein the cost of a tangible asset is spread over the asset's useful life. Depreciation usually denotes how much of the asset's value has been used up and is usually considered an operating expense. Depreciation occurs through normal wear and tear, obsolescence, accidents, etc. Video

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