this response must be 2-3 pages
Part I
The budget scenario consists of actual and budgeted figures. Assume that Eastside Urgent Care Clinic anticipated that it would provide 2,500 flu shots in 2010 to noninsured patients at $10 per shot. The revenue and expenses were budgeted for 2,700 flu shots in 2010 to noninsured patients. The budgeted expenses were $5,000. Assume that the clinic provided only 2,455 flu shots to noninsured patients, or 98%. The actual expenses were $4,500.
Calculate the following:
- Static budget variance
- Revenue
- Expenses
- Excess of expenses over revenue
Part II
Of the 4 cash flow reporting methods provided, which method is used in the following scenario?
Scenario:
Assumptions
- Item: The proposal is for the purchase of a new MRI machine
- Cost: The machine costs $1,500,000. The cost for preparing the MRI suite is $500,000. The total cost is $2 million.
- Life: 10 years
- Salvage value: $100,000
- Cost of capital: Estimated at 5%
- Cash flow: The MRI machine is expected to generate revenue.
The increase in revenue is anticipated to be $2,500,000 over a period of 5 years.
- Year 0 = ($2,000,000)
- Year 1 = $500,000
- Year 2 = $500,000
- Year 3 = $500,000
- Year 4 = $500,000
- Year 5 = $500,000
