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Question - You are considering starting a walk-in clinic. Your financial projections for the first year of operations are as follows:
Revenues (10,000 visits) $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 costs are fixed, except supply costs (medical and administrative), which are variable. Furthermore, assume that the clinic must pay taxes at a 30 percent rate.
Required -
a. Construct the clinic's projected P&L statement.
b. What number of visits is required to break even (revenue covers all accounting costs)?
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