Southwest Hospital has an operating room used only for eye surgery. The annual cost of rent,...

  

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Southwest Hospital has an operating room used only for eye surgery. The annual cost of rent, heat, and electricity for the operating room and its equipment is $360,000, and the annual salaries of the staff for this room total to $540,000. Each surgery performed requires the use of $760 worth of medical supplies and drugs. To promote goodwill, every patient receives a bouquet of flowers the day after surgery. In addition, one quarter of patients require dark glasses, which the hospital provides free of charge. It costs the hospital $30 for each bouquet of flowers and $40 for each pair of glasses. The hospital receives a payment of $2000 for each eye operation performed. 1. Identify the revenue per case and the annual fixed and variable costs for running the operating room. Use these values to construct cost and revenue functions, with r representing the number of operations performed per year. Use Excel to graph these functions over an appropriate range of a-values. 2. How many eye operations must the hospital perform each year in order to break even? 3. Southwest Hospital currently averages 70 eye operations per month. One of the nurses has just learned about a machine that would reduce by $100 per patient the amount of medical supplies needed. It can be leased for $100,000 annually. Keeping in mind the financial cost and benefits, advise the hospital on whether it should lease this machine. Use Excel to graph the cost and revenue functions in this adjusted scenario. Southwest Hospital has an operating room used only for eye surgery. The annual cost of rent, heat, and electricity for the operating room and its equipment is $360,000, and the annual salaries of the staff for this room total to $540,000. Each surgery performed requires the use of $760 worth of medical supplies and drugs. To promote goodwill, every patient receives a bouquet of flowers the day after surgery. In addition, one quarter of patients require dark glasses, which the hospital provides free of charge. It costs the hospital $30 for each bouquet of flowers and $40 for each pair of glasses. The hospital receives a payment of $2000 for each eye operation performed. 1. Identify the revenue per case and the annual fixed and variable costs for running the operating room. Use these values to construct cost and revenue functions, with r representing the number of operations performed per year. Use Excel to graph these functions over an appropriate range of a-values. 2. How many eye operations must the hospital perform each year in order to break even? 3. Southwest Hospital currently averages 70 eye operations per month. One of the nurses has just learned about a machine that would reduce by $100 per patient the amount of medical supplies needed. It can be leased for $100,000 annually. Keeping in mind the financial cost and benefits, advise the hospital on whether it should lease this machine. Use Excel to graph the cost and revenue functions in this adjusted scenario.