GHA 2 FINANCE

Assignment Exercise 18-2 (p. 564) Three Level Revenue Forecast

Create the required table in an Excel document and submit the assignment via the link provided below.

The idea of this assignment is that since we cannot tell the future, we often make assumptions of what is likely to happen.  When we make assumptions, we tend to have a realistic idea of what could happen, a sense of a ‘worse case’ scenario, and a sense of a ‘best case’ scenario.  Looking at these three options helps us anticipate future need and plan accordingly.

To complete this assignment, you must calculate the revenue forecasts at each level (and show your work), but you do not need to create the line chart shown in Figure 18-5 (p. 219).  In other words, just show your calculations — do not worry about creating a chart/graph.

Assignment Exercise 18-2 already provides you with the facts that you need. You are given the ‘base level’ forecast (which would be the same as the ‘basic forecast’ line in Fig. 18-5).  From that, you can use addition and subtraction to calculate the ‘high forecast’ (or ‘best case’) and ‘low forecast’ (or ‘worst case’) revenue amounts. 

You might find it helpful to use this format:

Best: best volume per year x rate per procedure = best revenue per year

Base: base volume per year x rate per procedure = base revenue per year

Worse: worse volume per year x rate per procedure = worse revenue per year