Question: Please do three scenario managers each in an excel sheet for this ( number of procedures per day, average revenue per procedure, and building and
Please do three scenario managers each in an excel sheet for this number of procedures per day, average revenue per procedure, and building and equipment salvage value
To develop the data needed for the risk analysis, Jules Bergman, Coral
Bay's director of capital budgeting, met with the department heads of sur
gery, marketing, and facilities. After several sessions, they concluded that
three input variables are highly uncertain: number of procedures per day,
average revenue per procedure, and building and equipment salvage value.
If another entity enters the local ambulatory surgery market, the number of
procedures could be as low as ten per day. Conversely, if acceptance is strong
and no competing surgery centers are built, the number of procedures could
be as high as per day, compared with the most likely value of per day.
The expected average net patient revenue of $ is a function of the
types of procedures performed and the amount of managed care penetra
tion. If surgery severity were high ie if a higher number of complicated
procedures than anticipated were performed and managed care penetra
tion remained low, then the average revenue could be as high as $
Conversely, if the severity were lower than expected and managed care
penetration increases, the average revenue could be as low as $ Finally,
if real estate and medical equipment values stay strong, the building and
equipment salvage value could be as high as $ million, but if the market
weakens, the salvage value could be as low as $ million, compared with an
expected value of $ million.
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