Q4. Lifecare Clinic has annual net patient service revenues of $25,600,000. It has two major third-party payers, plus some of its patients are self-payers. The hospital's patient accounts manager estimates that 15% of the hospital's revenue is collected from self-pay on the 30th day, 65% is collected on the 60th day (payer A), and 25% is collected on the 90th day (payer B). Assume 360 days per year.
a. What is Clinic's average collection period? b. What is the firm's current receivables balance?