Based on Reed Hospital - Break Even Analysis, answer the following questions:

1. Although you are basically satisfied with the analysis presented in the case thus far, you are concerned about the uncertainties inherent in the revenue and expense data supplied by the Urgent Care Center's director.  Assess each element in the proforma profit and loss statement.
   • Are any items more uncertain than the others?
   • How could uncertainty be worked into the analysis?
   • What additional information, if any, might you want to obtain from the Urgent Care Center's director?
2. Does the Urgent Care Center have any value to the hospital beyond that considered by the numerical analysis just conducted?
3. Do the actions by Baptist Hospital have any bearing on the final decision regarding the Urgent Care Center?
4. What is your final recommendation concerning the future of the Urgent Care Center?
Read Hospital - Break Even Analysis. This case illustrates the use of volume break-even analysis to assess the financial impact of several alternative courses of action regarding a hospital's Urgent Care Center. Because there are no capital expenditures involved in the alternatives, a discounted cash flow (NPV/IRR) analysis cannot be undertaken.

 

Link to Case Study:

file:///C:/Users/brian/Downloads/Reed%20Hospital%20-%20BEA.pdf

Answer rating: 100% (QA)

Answer Answer1 The more uncertain elements in the pro forma data in our opinion are 1Baptists acquis... View the full answer