During a particular year, a not-for-profit hospital provide s services that at standard rates would be billed at $200 million. This amount includes $10 million of charity care.

Of the remaining $190 million, it estimates that $120 million will be billed to third-party providers, which, per contractual agreements, will pay only 75 percent of the standards rate (i.e., $90 million). Of the $70 million to be billed to individuals, the hospital estimates that $40 million will have to be written off as bad debts. The hospital should recognize net patient care revenue (in millions) of:

(a) $120 MM

(b) $160 MM

(c) $190 MM

(d) $200 MM

Answer rating: 100% (QA)

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