5.8 You are considering starting a walk-in clinic. Your financial projections fo

Question

5.8 You are considering starting a walk-in clinic. Your financial projections for the first year of operations are as follows:

Revenues (10,000)        $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 cost are fixed except supply costs, which are variable. Furthermore, assume that the clinic must pay taxes at a 30 percent rate.

Construct the clinics projected P & L statement.

5.8 You are considering starting a walk-in clinic. Your financial projections for the first year of operations are as follows:

Revenues (10,000)        $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 cost are fixed except supply costs, which are variable. Furthermore, assume that the clinic must pay taxes at a 30 percent rate.

Construct the clinics projected P & L statement.

Explanation / Answer

P& L STATEMENT Number of Visits (10,000) Per Unit Cost Total Revenues $400,000 $40 Less:Total Variable Costs $60,000 $6 Contribution Margin $340,000 $34 Less: Fixed Cost $257,500 Profit $82,500 Less: Tax @30% $24,750 Net Profit $57,750

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