Unit 5 Assignment 1 – Purchase Proposal
Submit Assignment
- Due Sunday by 11:59pm
- Points 50
- Submitting a text entry box or a file upload
Estimated time to complete: 2 hours
Instructions
You are the practice manager for Dermatology Associates of Linwood (DAL): a multi-physician dermatology practice. Recently, the physician partners have decided to invest in purchasing an existing dermatology practice in a neighboring city, which will be operated under the group’s name. They have asked you to research the financial logistics of acquiring this new location. The practice is fully-staffed, however the (one) physician owner is retiring, leaving an opening for a new physician to be hired. In keeping with DAL’s standard of care, several new expenses will be incurred with the acquisition, including: access to DAL’s electronic medical record system, a Fraxel laser, and new furniture for the waiting room area.
Draft a proposal, addressing the following items in a Word document:
- Summary of estimated primary startup costs (create a table to illustrate and organize this information)
- Financing options
- Summary of when the practice will reach profitability. Explain the finance principle you can use to make this determination. (You do not need to perform the calculations, but you do need to explain how to estimate and assess profitability).
- Include a minimum of three references, APA style, on a separate page.
Please review the rubric to ensure that your assignment meets criteria.
Submit:
Rubric
HC306 – Unit 5 Assignment 1
HC306 – Unit 5 Assignment 1
| Criteria | Ratings | Pts |
|---|
This criterion is linked to a Learning OutcomeContent | | 15.0 pts 5 Demonstrates the ability to construct a clear and insightful problem statement/thesis statement/topic statement with evidence of all relevant contextual factors. | 14.0 pts 4 Demonstrates the ability to construct a problem statement, thesis statement/topic statement with evidence of most relevant contextual factors, and problem statement is adequately detailed. | 12.0 pts 3 Begins to demonstrate the ability to construct a problem statement/thesis statement/topic statement with evidence of most relevant contextual factors, but problem statement is superficial. | 11.0 pts 2 Demonstrates a limited ability in identifying a problem statement/thesis statement/topic statement or related contextual factors. | 9.0 pts 1 Demonstrates the ability to explain contextual facts but does not provide a defined statement. | 0.0 pts 0 There is no evidence of a defined statement. |
| 15.0 pts |
This criterion is linked to a Learning OutcomeAnalysis | | 25.0 pts 5 Organizes and compares evidence to reveal insightful patterns, differences, or similarities related to focus. | 23.0 pts 4 Organizes and interprets evidence to reveal patterns, differences, or similarities related to focus. | 20.0 pts 3 Organizes and describes evidence according to patterns, differences, or similarities related to focus. | 18.0 pts 2 Organizes evidence, but the organization is not effective in revealing patterns, differences, or similarities. | 15.0 pts 1 Describes evidence, but it is not organized and/ or is unrelated to focus. | 0.0 pts 0 Lists evidence, but it is not organized and/ or is unrelated to focus. |
| 25.0 pts |
This criterion is linked to a Learning OutcomeWriting | | 5.0 pts 5 The paper exhibits a excellent command of written English language conventions. The paper has no errors in mechanics, grammar, or spelling. | 4.5 pts 4 The paper exhibits a good command of written English language conventions. The paper has no errors in mechanics, or spelling with minor grammatical errors that impair the flow of communication. | 4.0 pts 3 The paper exhibits a basic command of written English language conventions. The paper has minor errors in mechanics, grammar, or spelling that impact the flow of communication. | 3.5 pts 2 The paper exhibits a limited command of written English language conventions. The paper has frequent errors in mechanics, grammar, or spelling that impede the flow of communication. | 3.0 pts 1 The paper exhibits little command of written English language conventions. The paper has errors in mechanics, grammar, or spelling that cause the reader to stop and reread parts of the writing to discern meaning. | 0.0 pts 0 The paper does not demonstrate command of written English language conventions. The paper has multiple errors in mechanics, grammar, or spelling that cause the reader difficulty discerning the meaning. |
| 5.0 pts |
This criterion is linked to a Learning OutcomeAPA | | 5.0 pts 5 The required APA elements are all included with correct formatting, including in-text citations and references. | 4.5 pts 4 The required APA elements are all included with minor formatting errors, including in-text citations and references. | 4.0 pts 3 The required APA elements are all included with multiple formatting errors, including in-text citations and references. | 3.5 pts 2 The required APA elements are not all included. AND/OR there are major formatting errors, including in-text citations and references. | 3.0 pts 1 Several APA elements are missing. The errors in formatting demonstrate limited understanding of APA guidelines, in-text-citations, and references. | 0.0 pts 0 There is little to no evidence of APA formatting. AND/OR there are no in-text citations AND/OR references. |
| 5.0 pts |
Total Points: 50.0 |
Unit 5 Assignment 1 – Purchase Proposal
Submit Assignment
- Due Sunday by 11:59pm
- Points 50
- Submitting a text entry box or a file upload
Estimated time to complete: 2 hours
Instructions
You are the practice manager for Dermatology Associates of Linwood (DAL): a multi-physician dermatology practice. Recently, the physician partners have decided to invest in purchasing an existing dermatology practice in a neighboring city, which will be operated under the group’s name. They have asked you to research the financial logistics of acquiring this new location. The practice is fully-staffed, however the (one) physician owner is retiring, leaving an opening for a new physician to be hired. In keeping with DAL’s standard of care, several new expenses will be incurred with the acquisition, including: access to DAL’s electronic medical record system, a Fraxel laser, and new furniture for the waiting room area.
Draft a proposal, addressing the following items in a Word document:
- Summary of estimated primary startup costs (create a table to illustrate and organize this information)
- Financing options
- Summary of when the practice will reach profitability. Explain the finance principle you can use to make this determination. (You do not need to perform the calculations, but you do need to explain how to estimate and assess profitability).
- Include a minimum of three references, APA style, on a separate page.
Please review the rubric to ensure that your assignment meets criteria.
Submit:
Rubric
HC306 – Unit 5 Assignment 1
HC306 – Unit 5 Assignment 1
| Criteria | Ratings | Pts |
|---|
This criterion is linked to a Learning OutcomeContent | | 15.0 pts 5 Demonstrates the ability to construct a clear and insightful problem statement/thesis statement/topic statement with evidence of all relevant contextual factors. | 14.0 pts 4 Demonstrates the ability to construct a problem statement, thesis statement/topic statement with evidence of most relevant contextual factors, and problem statement is adequately detailed. | 12.0 pts 3 Begins to demonstrate the ability to construct a problem statement/thesis statement/topic statement with evidence of most relevant contextual factors, but problem statement is superficial. | 11.0 pts 2 Demonstrates a limited ability in identifying a problem statement/thesis statement/topic statement or related contextual factors. | 9.0 pts 1 Demonstrates the ability to explain contextual facts but does not provide a defined statement. | 0.0 pts 0 There is no evidence of a defined statement. |
| 15.0 pts |
This criterion is linked to a Learning OutcomeAnalysis | | 25.0 pts 5 Organizes and compares evidence to reveal insightful patterns, differences, or similarities related to focus. | 23.0 pts 4 Organizes and interprets evidence to reveal patterns, differences, or similarities related to focus. | 20.0 pts 3 Organizes and describes evidence according to patterns, differences, or similarities related to focus. | 18.0 pts 2 Organizes evidence, but the organization is not effective in revealing patterns, differences, or similarities. | 15.0 pts 1 Describes evidence, but it is not organized and/ or is unrelated to focus. | 0.0 pts 0 Lists evidence, but it is not organized and/ or is unrelated to focus. |
| 25.0 pts |
This criterion is linked to a Learning OutcomeWriting | | 5.0 pts 5 The paper exhibits a excellent command of written English language conventions. The paper has no errors in mechanics, grammar, or spelling. | 4.5 pts 4 The paper exhibits a good command of written English language conventions. The paper has no errors in mechanics, or spelling with minor grammatical errors that impair the flow of communication. | 4.0 pts 3 The paper exhibits a basic command of written English language conventions. The paper has minor errors in mechanics, grammar, or spelling that impact the flow of communication. | 3.5 pts 2 The paper exhibits a limited command of written English language conventions. The paper has frequent errors in mechanics, grammar, or spelling that impede the flow of communication. | 3.0 pts 1 The paper exhibits little command of written English language conventions. The paper has errors in mechanics, grammar, or spelling that cause the reader to stop and reread parts of the writing to discern meaning. | 0.0 pts 0 The paper does not demonstrate command of written English language conventions. The paper has multiple errors in mechanics, grammar, or spelling that cause the reader difficulty discerning the meaning. |
| 5.0 pts |
This criterion is linked to a Learning OutcomeAPA | | 5.0 pts 5 The required APA elements are all included with correct formatting, including in-text citations and references. | 4.5 pts 4 The required APA elements are all included with minor formatting errors, including in-text citations and references. | 4.0 pts 3 The required APA elements are all included with multiple formatting errors, including in-text citations and references. | 3.5 pts 2 The required APA elements are not all included. AND/OR there are major formatting errors, including in-text citations and references. | 3.0 pts 1 Several APA elements are missing. The errors in formatting demonstrate limited understanding of APA guidelines, in-text-citations, and references. | 0.0 pts 0 There is little to no evidence of APA formatting. AND/OR there are no in-text citations AND/OR references. |
| 5.0 pts |
Total Points: 50.0 |
Expert Solution Preview
Introduction:
As the practice manager for Dermatology Associates of Linwood (DAL), I have been tasked with researching the financial logistics of acquiring a neighboring dermatology practice. This proposal addresses the estimated primary startup costs, financing options, and the profitability timeline for the acquisition.
Summary of Estimated Primary Startup Costs:
The estimated primary startup costs for the acquisition of the neighboring dermatology practice are as follows:
– Purchase price of the practice – $500,000
– Fraxel laser – $50,000
– New furniture for waiting room area – $20,000
– Access to DAL’s electronic medical record system – $10,000
– Hiring of a new physician – $200,000
– Legal and accounting costs – $15,000
– Total estimated startup costs – $795,000
Financing Options:
DAL has a few financing options for the acquisition of the neighboring dermatology practice:
– Cash reserves – DAL can use its own cash reserves to fund the acquisition.
– Bank Loan – DAL can secure a bank loan with an interest rate of 5%.
– Investors – DAL can secure investors who will purchase shares of the practice and receive a portion of the profits.
Summary of When the Practice Will Reach Profitability:
The practice will reach profitability when the revenues generated by the practice are greater than the expenses incurred to operate the practice. One financial principle to make this determination is the break-even analysis. By calculating the break-even point, we can determine how much revenue is needed to cover all expenses and begin generating profit. To calculate the break-even point, we need to determine the fixed and variable costs of the practice and divide them by the contribution margin, which is the revenue per unit minus the variable cost per unit. Once the break-even point is determined, we can estimate when the practice will become profitable based on projected revenues.
References:
1. Healthcare Financial Management Association (2014). Break-Even Analysis. Retrieved from https://www.hfma.org/topics/hfm/2014/may/break-even-analysis.html
2. Investopedia (2021). Break-Even Analysis. Retrieved from https://www.investopedia.com/terms/b/breakevenanalysis.asp
3. American Medical Association (2019). Medical Practice Valuation: Principles and Methods. Retrieved from https://www.ama-assn.org/system/files/2019-06/principles-medical-practice-valuation.pdf
