Cindy Justus is the managing director of the Wichita Day Care Center. Wichita is

ID: 2490628 • Letter: C

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Cindy Justus is the managing director of the Wichita Day Care Center. Wichita is currently set up as a full-time child care facility for children between the ages of 12 months and 6 years. Cindy is trying to determine whether the center should expand its facilities to incorporate a newborn care room for infants between the ages of 6 weeks and 12 months. The necessary space already exists. An investment of $25,070 would be needed, however, to purchase cribs, high chairs, etc. The equipment purchased for the room would have a 5-year useful life with zero salvage value.

The newborn nursery would be staffed to handle 12 infants on a full-time basis. The parents of each infant would be charged $218 weekly, and the facility would operate 52 weeks of the year. Staffing the nursery would require two full-time specialists and five part-time assistants at an annual cost of $102,800. Food, diapers, and other miscellaneous supplies are expected to total $13,100 annually. Cindy Justus is the managing director of the Wichita Day Care Center. Wichita is currently set up as a full-time child care facility for children between the ages of 12 months and 6 years. Cindy is trying to determine whether the center should expand its facilities to incorporate a newborn care room for infants between the ages of 6 weeks and 12 months. The necessary space already exists. An investment of $25,070 would be needed, however, to purchase cribs, high chairs, etc. The equipment purchased for the room would have a 5-year useful life with zero salvage value.

The newborn nursery would be staffed to handle 12 infants on a full-time basis. The parents of each infant would be charged $218 weekly, and the facility would operate 52 weeks of the year. Staffing the nursery would require two full-time specialists and five part-time assistants at an annual cost of $102,800. Food, diapers, and other miscellaneous supplies are expected to total $13,100 annually. $ $ Cindy Justus is the managing director of the Wichita Day Care Center. Wichita is currently set up as a full-time child care facility for children between the ages of 12 months and 6 years. Cindy is trying to determine whether the center should expand its facilities to incorporate a newborn care room for infants between the ages of 6 weeks and 12 months. The necessary space already exists. An investment of $25,070 would be needed, however, to purchase cribs, high chairs, etc. The equipment purchased for the room would have a 5-year useful life with zero salvage value.

The newborn nursery would be staffed to handle 12 infants on a full-time basis. The parents of each infant would be charged $218 weekly, and the facility would operate 52 weeks of the year. Staffing the nursery would require two full-time specialists and five part-time assistants at an annual cost of $102,800. Food, diapers, and other miscellaneous supplies are expected to total $13,100 annually.

Explanation / Answer

Revenue ($218 x 12 x 52) $ 1,36,032.00 Less: Salary of the staff $ 1,02,800.00 Food, diapers and other miscllaneous expenses $ 13,100.00 Depreciation $ 5,014.00 $ 1,20,914.00 Annual Net Income $ 15,118.00 Annual Cash Inflow ($218x12x52) $ 1,36,032.00 Less: Salary of the staff $ 1,02,800.00 Food, diapers and other miscllaneous expenses $ 13,100.00 $ 1,15,900.00 Annual cash flow $ 20,132.00

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Cindy Justus is the managing director of the Wichita Day Care Center. Wichita is

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Cindy Justus is the managing director of the Wichita Day Care Center. Wichita is

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