Total Annual Cost for Healthcare Program:

Based on the previous estimates:

  • Lower Estimate: $43 million

  • Middle Estimate: $70 million

  • Upper Estimate: $80 million

Number of Households in the Verde Valley:

  • Total Number of Households: 30,000

Equal Monthly Investment Per Household:

  1. Lower Estimate ($43 million):

    • Annual Investment per Household: Annual Investment per Household=43,000,00030,000=$1,433.33\text{Annual Investment per Household} = \frac{43,000,000}{30,000} = \$1,433.33Annual Investment per Household=30,00043,000,000​=$1,433.33

    • Monthly Investment per Household: Monthly Investment per Household=1,433.3312=$119.44\text{Monthly Investment per Household} = \frac{1,433.33}{12} = \$119.44Monthly Investment per Household=121,433.33​=$119.44

  2. Middle Estimate ($70 million):

    • Annual Investment per Household: Annual Investment per Household=70,000,00030,000=$2,333.33\text{Annual Investment per Household} = \frac{70,000,000}{30,000} = \$2,333.33Annual Investment per Household=30,00070,000,000​=$2,333.33

    • Monthly Investment per Household: Monthly Investment per Household=2,333.3312=$194.44\text{Monthly Investment per Household} = \frac{2,333.33}{12} = \$194.44Monthly Investment per Household=122,333.33​=$194.44

  3. Upper Estimate ($80 million):

    • Annual Investment per Household: Annual Investment per Household=80,000,00030,000=$2,666.67\text{Annual Investment per Household} = \frac{80,000,000}{30,000} = \$2,666.67Annual Investment per Household=30,00080,000,000​=$2,666.67

    • Monthly Investment per Household: Monthly Investment per Household=2,666.6712=$222.22\text{Monthly Investment per Household} = \frac{2,666.67}{12} = \$222.22Monthly Investment per Household=122,666.67​=$222.22

Revised ROI Calculation:

ROI Formula:

ROI=Equity Increase−Annual InvestmentAnnual Investment×100%\text{ROI} = \frac{\text{Equity Increase} - \text{Annual Investment}}{\text{Annual Investment}} \times 100\%ROI=Annual InvestmentEquity Increase−Annual Investment​×100%

Lower Estimate ($60 million):

1. Low Income Households:

  • Annual Investment: $1,433.33

  • Equity Increase: $6,000

  • ROI Calculation: ROI=6,000−1,433.331,433.33×100%=318.75%\text{ROI} = \frac{6,000 - 1,433.33}{1,433.33} \times 100\% = 318.75\%ROI=1,433.336,000−1,433.33​×100%=318.75%

2. Middle Income Households:

  • Annual Investment: $2,333.33

  • Equity Increase: $12,000

  • ROI Calculation: ROI=12,000−2,333.332,333.33×100%=414.29%\text{ROI} = \frac{12,000 - 2,333.33}{2,333.33} \times 100\% = 414.29\%ROI=2,333.3312,000−2,333.33​×100%=414.29%

3. High Income Households:

  • Annual Investment: $2,666.67

  • Equity Increase: $30,000

  • ROI Calculation: ROI=30,000−2,666.672,666.67×100%=1,125.00%\text{ROI} = \frac{30,000 - 2,666.67}{2,666.67} \times 100\% = 1,125.00\%ROI=2,666.6730,000−2,666.67​×100%=1,125.00%

Upper Estimate ($600 million):

1. Low Income Households:

  • Annual Investment: $1,433.33

  • Equity Increase: $12,000

  • ROI Calculation: ROI=12,000−1,433.331,433.33×100%=737.50%\text{ROI} = \frac{12,000 - 1,433.33}{1,433.33} \times 100\% = 737.50\%ROI=1,433.3312,000−1,433.33​×100%=737.50%

2. Middle Income Households:

  • Annual Investment: $2,333.33

  • Equity Increase: $24,000

  • ROI Calculation: ROI=24,000−2,333.332,333.33×100%=927.14%\text{ROI} = \frac{24,000 - 2,333.33}{2,333.33} \times 100\% = 927.14\%ROI=2,333.3324,000−2,333.33​×100%=927.14%

3. High Income Households:

  • Annual Investment: $2,666.67

  • Equity Increase: $60,000

  • ROI Calculation: ROI=60,000−2,666.672,666.67×100%=2,150.00%\text{ROI} = \frac{60,000 - 2,666.67}{2,666.67} \times 100\% = 2,150.00\%ROI=2,666.6760,000−2,666.67​×100%=2,150.00%

Summary of ROI for Equal Monthly Payments:

  1. Lower Estimate ($60 million):

    • All Households (Same Monthly Payment):

      • Monthly Payment: $119.44

      • Low Income Households: 318.75%

      • Middle Income Households: 414.29%

      • High Income Households: 1,125.00%

  2. Upper Estimate ($600 million):

    • All Households (Same Monthly Payment):

      • Monthly Payment: $222.22

      • Low Income Households: 737.50%

      • Middle Income Households: 927.14%

      • High Income Households: 2,150.00%

These revised ROI figures reflect the return on investment when all households pay the same amount for the healthcare program. The high ROI percentages indicate a highly favorable return compared to the annual investment in all scenarios.

UCHC plans to transfer the healthcare program to the residents of Verde Valley when it is functional. The following are estimates of how that might affect the residents of Verde Valley to own the program they have built.

Adjusted Annual Profit Calculation:

  1. Lower Estimate ($43 million in annual costs):

    • Potential Additional Revenue (30% of costs): 43,000,000×0.30=12,900,00043,000,000 \times 0.30 = 12,900,00043,000,000×0.30=12,900,000

    • Total Potential Revenue: 43,000,000+12,900,000=55,900,00043,000,000 + 12,900,000 = 55,900,00043,000,000+12,900,000=55,900,000

    • Annual Profit: 12,900,00012,900,00012,900,000

  2. Middle Estimate ($70 million in annual costs):

    • Potential Additional Revenue (30% of costs): 70,000,000×0.30=21,000,00070,000,000 \times 0.30 = 21,000,00070,000,000×0.30=21,000,000

    • Total Potential Revenue: 70,000,000+21,000,000=91,000,00070,000,000 + 21,000,000 = 91,000,00070,000,000+21,000,000=91,000,000

    • Annual Profit: 21,000,00021,000,00021,000,000

  3. Upper Estimate ($80 million in annual costs):

    • Potential Additional Revenue (30% of costs): 80,000,000×0.30=24,000,00080,000,000 \times 0.30 = 24,000,00080,000,000×0.30=24,000,000

    • Total Potential Revenue: 80,000,000+24,000,000=104,000,00080,000,000 + 24,000,000 = 104,000,00080,000,000+24,000,000=104,000,000

    • Annual Profit: 24,000,00024,000,00024,000,000

Distributing Profit to Households:

Given the adjusted annual profits, the profit per household can be calculated based on the number of households:

  1. Lower Estimate ($12.9 million profit):

    • Profit per Household: 12,900,00030,000=430\frac{12,900,000}{30,000} = 43030,00012,900,000​=430

  2. Middle Estimate ($21 million profit):

    • Profit per Household: 21,000,00030,000=700\frac{21,000,000}{30,000} = 70030,00021,000,000​=700

  3. Upper Estimate ($24 million profit):

    • Profit per Household: 24,000,00030,000=800\frac{24,000,000}{30,000} = 80030,00024,000,000​=800

Summary of Potential Profit per Household:

  1. Lower Estimate:

    • Annual Profit per Household: $430

  2. Middle Estimate:

    • Annual Profit per Household: $700

  3. Upper Estimate:

    • Annual Profit per Household: $800

Conclusion:

If the healthcare program is transferred to the residents and it generates 30% of the annual costs as additional revenue, each household might expect an annual profit of:

  • $430 in the lower estimate scenario.

  • $700 in the middle estimate scenario.

  • $800 in the upper estimate scenario.

These revised figures reflect the potential profit per household based on 30% of the program’s annual costs being additional revenue.