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?



  • 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
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