Rampart Hospital Has Total Variable Costs of 90% of Total

question 64

Multiple Choice

Rampart Hospital has total variable costs of 90% of total revenues and fixed costs of $50 million per year. There are 50,000 patient- days estimated for next year. What is the average daily revenue per patient necessary to breakeven?

• A) $250 is the average daily revenue per patient necessary to breakeven.
• B) $4,000 is the average daily revenue per patient necessary to breakeven.
• C) $10,000 is the average daily revenue per patient necessary to breakeven.
• D) $1,000 is the average daily revenue per patient necessary to breakeven.

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Definitions:

General Cash Offers

A public offering in which securities are sold for cash to the general investing public.

Flotation Costs

The costs associated with issuing new securities, including underwriting fees, legal expenses, and registration fees.

Rights Offerings

A method by which a company raises capital by giving existing shareholders the right to buy additional shares at a discount.

Market Value

The existing market price for the acquisition or sale of an asset or service.