Assignment 2: break-even analysis

Maryland Home and Community-Based Services (MHCBS) is considering a major expansion that will enable it to attract a different clientele to its organization. Currently, they serve only 34% of the frail elderly seniors and persons with disabilities in the local area. The new chief CEO would like the organization to expand its revenue stream by investing in a senior multipurpose center serving healthy seniors by offering them arts and crafts and health and wellness programs.

The center will also contain an Internet café offering nutritious breakfast and lunch options.The CEO has commissioned a needs assessment, and the study’s results reveal that there are approximately 120 seniors in the local community who are interested in this center and the CEO expects growth of the aging population to be at least 10% each year. Cost growth across all areas of expense is expected to rise by 5% each year.

The CEO has presented her proposal and financial information to the Board of Directors, and they have advised her that they are in full support of her strategy only if the program is a benefit to the community and if the organization can recoup its investment in five years.

The CEO has asked you if this can be achieved.   Based on the information presented in the scenario, calculate the two analyses and explain, in a brief memorandum to the CEO, their implications. 

Service Line Break Even Analysis Memo

The proposed costs to operate this new facility are as follows:Expected Monthly Revenue (Membership Fee): $125 per personMonthly Fixed CostsUtilities: $590Health/Wellness Staff: $2,500Arts/Crafts Staff: $2,000Supplies: $800Fitness Equipment Maintenance Contract: $200Variable CostsMonthly Lunch Cost: $25Monthly Breakfast Cost: $15Based on the information above, once the minimum threshold of participants is reached, the initial investment to establish the center is $317,880. The organization anticipates that it will generate $46,920 of net revenues in the first year, $68,166 in the second year, $93,404 in the third year, $123,287 in the fourth year, and $158,573 in the fifth year.Perform the break-even analysis to determine how many seniors would need to have a full monthly membership for UMGC Home and Community-Based Services to cover its monthly expenses. Calculate the payback period to determine how long it will take for the organization to recover its initial investment of establishing the senior multipurpose center.
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Rubric Name: Rubric for calculation assignments

This table lists criteria and criteria group name in the first column. The first row lists level names and includes scores if the rubric uses a numeric scoring method.CriteriaSuperior 90-100%Good 80-89%Substandard 70-79%Limited performance 0-69%Criterion ScoreCriterion 1100 points

All required calculations are correct, the calculation formulas are correct and available for review, the graph is present (if applicable)  and is developed correctly and fully. All questions are answered  (if applicable) correctly demonstrating critical thinking skills and applying APA to citations and references correctly89 points

70% of the calculations are correct, the calculation formulas are present, graph is present (if applicable) but may be partially incorrect or missing labels. Some questions are answered (if applicable) correctly demonstrating critical thinking skills and applying APA to some  citations and references correctly 79 points

Less then 70% of the calculations are correct, formulas are absent or incorrect, graph is absent or incorrect (including missing labels). Few questions are answered. APA was or was not applied to some  citations and references  10 points

Submission on the topic is present

Few (if any) of the calculations are correct, formulas are absent or incorrect, graph is absent or incorrect (including missing labels). Questions are not answered. APA was or was not applied to some  citations and references 

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