You are considering opening a new patient care center in rental space. You will operate this...

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You are considering opening a new patient care center in rental space. You will operate this center eight hours a day Monday through Friday and half a day on Saturday. Volume in the first year is expected to be 2,800 visits. This is expected to grow by 10% each year. The price you will charge for each visit is $400 and the collection rate is 90%. Staff costs are $510,000 for salaries and an additional 25% for fringe benefits. Supplies will cost $200,000 for fixed items and $100 per procedure for variable items. The space will cost 2,000/month for rent and an additional $350/month for utilities. Based on marginal analysis, would you pursue this venture? You are considering opening a new patient care center in rental space. You will operate this center eight hours a day Monday through Friday and half a day on Saturday. Volume in the first year is expected to be 2,800 visits. This is expected to grow by 10% each year. The price you will charge for each visit is $400 and the collection rate is 90%. Staff costs are $510,000 for salaries and an additional 25% for fringe benefits. Supplies will cost $200,000 for fixed items and $100 per procedure for variable items. The space will cost 2,000/month for rent and an additional $350/month for utilities. Based on marginal analysis, would you pursue this venture?

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Step 11 Calculation of income under marginal analysis Assuming project is taken for 5 years Particul... View the full answer