Answer:
$318,680
Explanation:
initial investment ($506,000)
cash flow year 1 = $212,000
cash flow year 2 = $212,000
cash flow year 3 = $212,000
cash flow year 4 = $212,000
cash flow year 5 = $212,000
discount rate 9%
present value of an ordinary annuity for 5 years and 9% discount rate = 3.89
the net present value = (yearly cash flow x annuity value) - initial investment = ($212,000 x 3.89) -$506,000 = $824,680 - $506,000 = $318,680
The net present value of an investment equals the difference between the present value of the cash flows generated by the investment minus the initial cost of the investment.
Answer: Please refer to Explanation
Explanation:
Advise I would give.
1. The process for the collection of cash should be changed to bring in revenue faster. This can be done in a variety of ways,.
- By including in the terms of the contract that the service has to be paid for within a certain period such as a maximum of 4 weeks and then follow up each week on the customer so that they remember that they have a due bill.
- Giving payment based discounts such as a 5% discount if the service is paid for within a fortnight.
- Telling the customer to pay first, if not the full amount, at least a down payment with the total being settled at a later date.
These are but just some ways of getting the money faster but the bottomline is that payment needs to be received faster because the nurses are paid on a weekly basis.
2. Focus more on Patients with Insurance.
The company has a very low clientele base that use insurance and they should aim to increase that figure. This is because Insurance pays out timely and IHHPC will be sure that their payment will come because an Insurance company is bound by certain rules and regulations. For security of payments therefore, they should increase their insurance based clientele.
Answer:a company's ability to utilize money and workforce when producing goods or offering a service.
Explanation:
How much taxes they take off
