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If break-even analysis is given as follows: (SEE charts below) with break even calculated as 45 visits a day to break even (using formula fixed cost/revenue per unit-variable cost)

Allocation for next 3 yrs:

2020: $84,357

2021: $86,888

2020: $89,494

Q1. Should we close the center or should it remain open? and why?. How can we take actions to improve the centers financial performance?

Dade General Hospital - Doral Urgent Care Center Financial Analysis for 2019 Number of visits Net revenues Cost per visit 16,790 $671,600 $40 Income before allocation Allocation Net profit or loss $6,994 $81,900 -$74,906 Fixed Costs Expenses Salaries and wages Malpractice insurance Travel and education General insurance Subscription Building lease Total cost Amount $181,950 $34.820 $5,500 $8.200 $300 $178,236 $409,006 Cost per unit $10.84 $2.07 $0.33 $0.49 $0.02 $10.62 S24.36 Variable Costs Expenses Physician fees Equipment rental Electricity Water Total cost Amount $236,625 $2,500 $14,975 $1,500 $255,600 Cost per unit $14.09 $0.15 $0.89 $0.09 $15.22 Contribution margin $416,000 S24.78 Dade General Hospital - Doral Urgent Care Center Statement of Operations Actual for the years 2017 and 2018, Projections for the year 2019 2019 % Inc Projections 2017 2018 Inc Number of Visits 14,235 15,330 1,095 7.7% 16,790 Net Revenues $540,930 $597,870 $56,940 10.5% $671,600 Expenses: Salaries and wages Physician fees Malpractice insurance Travel and education General insurance Subscription Electricity Water Equipment rental Building lease Total Expenses $156,870 $168,949 $12,079 7.7% 204,000 219,708 15,708 7.7% 32,820 33,805 985 3.0% 3,500 5,500 2,000 57.1% 7,850 8,050 200 2.5% 252 265 13 5.2% 11,153 12,924 1,771 15.9% 1,150 1,350 200 17.4% 2,500 2,500 0.0% 168,000 173,040 5,040 3.0% $588,095 $626,091 $37,996 6.5% $181,950 236,625 34,820 5,500 8,200 300 14,975 1,500 2,500 178,236 $664,606 Income before allocation ($47,165) ($28,221) $18,944 Allocation from Hospital $75,000 $78,000 3,000 $6,994 $81,900 4.0% Net Profit or Loss ($122, 165) ($106,221) $15,944 ($74,906) Additional Operating and Financial Information Doral Urgent Care Center The Center had an average of 42 visits per day in 2018 and is projected to see an average 46 patients per day in 2019. The center has a capacity to see 80 patients per day Cancellation of the lease will incur a penalty of 6 months of rent, or $89.118 Incremental volume increases the variable costs proportionately The hospital overhead expenses are expected to increase by 3% annually Hospital allocation is based on number of visits The hospital will continue to incur the same expenses whether the center closes or not

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