Question

Assumptions | Average Charge: $120 | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 |

Contractual Adjustmen is 30% | ||||||

Expenses increase by 5% in a year | ||||||

Initial capital for equipment supplies and contingency plan is : $275,000 | ||||||

Proforma Format |
||||||

Revenue: | ||||||

Gross Revenue | [# of patient visits X average charge] | |||||

Contractual Adjustment | [.30 X average charge | |||||

Net revenue | [gross revenue - contractual adjustment] |

Patient visits: Year 1 = 7000 (assume they will increase by 10% each year),

Answer #1

1st year | 2nd year | 3rd year | 4th year | 5th year | ||

A | Average charge (as expenses are increasing 5% in every year so we assume correspondingly charges also increase by 5% in each year) | 120 | 126 | 132 | 138 | 145 |

B | Number of patients ( Number of patients are increase by 10% in each year) | 7,000 | 7,700 | 8,470 | 9,317 | 10,248 |

C | GROSS REVENUE (patient visit*average charge)
A*B |
840,000 | 970,200 | 1,118,040 | 1,285,746 | 1,485,960 |

D | Contractual adjustment. (30% of average charge) C*30% | 252,000 | 291,060 | 335,412 | 385,724 | 445,788 |

E | NET REVENUE (C-D) |
588,000 | 679,140 | 782,628 | 900,022 | 1,040,172 |

*Calculation is done upto the nearest $. |

In this question the capital initial equipment and contingency plan assumed as capital expenditure hence not included in above calculation, if we treat this expenditure as revenue expenditure than the net revenue of 1st year would be less than $275,000.

Period
Clinic 1
Clinic 2
Clinic 3
Clinic 4
Total
This Year
16,640
41,600
24,960
33,280
116,480
Next Year
?
?
?
?
121,139
9.2
Your data for the clinics in Exercise 9.1 suggest that Clinic 2
is operating at capacity and is highly efficient. Its output is
unlikely to increase. Furthermore, Clinic 4 has unused capacity but
is unlikely to attract additional patients. How would these facts
change your answer to Exercise 9.1? Continue to assume that overall
volume...

Adjustment data:
1.
Supplies on hand totaled $5,040.
2.
Depreciation is $16,905 on the equipment.
3.
Interest of $11,880 is accrued on notes payable at November
30.
Other data:
1.
Salaries expense is 70% selling and 30% administrative.
2.
Rent expense and utilities expenses are 80% selling and 20%
administrative.
3.
$30,000 of notes payable are due for payment next year.
4.
Maintenance and repairs expense is 100% administrative.
SHAMROCK FASHION CENTER
TRIAL BALANCE
NOVEMBER 30, 2017
Debit
Credit
Cash...

Security X has the following historical
returns.
Year
Return
1
10%
2
5%
3
-8%
4
7%
What is the average return of security X (arithmetic
return)? (5 points)
What is the standard deviation of security X? (5
points)
What range of returns would you expect to see 95% of the
time for this security? (5 points)
What is the geometric return of security X? (5
points)

Year
Stock X
Stock Y
1
8.00%
-8.00%
2
-5.00%
20.00%
3
11.00%
4.00%
4
7.00%
11.00%
What is the standard deviation of Stock Y?
Submit
Answer format: Percentage Round to: 2
decimal places (Example: 9.24%, % sign required. Will accept
decimal format rounded to 4 decimal places (ex: 0.0924))
unanswered
not_submitted
#4
Year
Stock X
Stock Y
1
8.00%
-8.00%
2
-5.00%
20.00%
3
11.00%
4.00%
4
7.00%
11.00%
What is the covariance of the returns of Stock X...

Use the chart to answer the questions
Year
Return
1 2%
2 -6%
3 -1%
4 14%
5 -1%
6 5%
What is the average return on
this stock?
What is the standard deviation
of the annual returns?
What is the expected return on a stock, given the Beta
is 1.2, the risk-free rate is 2% and the Market risk premium is
6%?
What is the most you should pay for a share of common
stock that just paid a...

Returns
Year
X
Y
1
13%
20%
2
31
41
3
20
-7
4
-21
-21
5
22
49
1) Calculate the arithmetic average return for X. Calculate the
arithmetic average for Y.
2) Calculate the variance for X and Y. Calculate the arithmetic
average for Y.
3) Calculate the standard deviation for X. Calculate the standard
deviation for Y.

1. A physician is considering opening a home health agency to
serve her patients and others in the community. She read the home
health industry in 2015 is expected to earn $5.3 billion on $73
billion in revenues (IBIS World). Create a scratch budget for the
physician based on the assumptions below. How is the agency
expected to perform relative to the industry?
Total visits: 12,000
Reimbursement per visit: $75
Management and support salaries: $120,000 (1 office manager and
1...

Returns
Year
X
Y
1
17
%
22
%
2
31
32
3
12
16
4
–
24
–
29
5
10
23
Using the returns shown above, calculate the arithmetic average
returns, the variances, and the standard deviations for X and Y.
Fill in the table below. (Do not round intermediate
calculations. Enter your average return and standard deviation as a
percent rounded to 2 decimal places, e.g., 32.16, and round the
variance to 5 decimal places, e.g., .16161.)...

Returns
Year X Y
1 11 % 23 %
2 15 26
3 10 11
4 –13 –14
5 10 16
Using the returns shown above, calculate the arithmetic average
returns, the variances, and the standard deviations for X and Y.
(Do not round intermediate calculations. Enter your average return
and standard deviation as a percent rounded to 2 decimal places,
e.g., 32.16, and round the variance to 5 decimal places, e.g.,
32.16161.)

Year
1
2
3
4
times times
times•••
FCF
1313
1515
1616
1717
Grow
by
5 %5%
per
year
a. Covan
has
88
million
shares? outstanding,
$22
million
in excess? cash, and it has no
debt. If its cost of capital is
12 %12%
,
what
should be its stock? price?
b. Covan
reinvests all its FCF
and
has no plans to add debt or change its cash holdings?
(it does
not invest its cash? holdings). If you plan
to...

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