The superintendent of a large hospital is evaluating the possible automation of one of its radiographic...

 

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The superintendent of a large hospital is evaluating the possible automation of one of its radiographic procedures. Currently the yearly fixed cost of the procedure is R100,000 and the variable cost is R500 per test. If the procedure is automated, the fixed cost will rise to R216,000 per year, but the variable cost will drop to R100 per test. In order to evaluate whether automation is an option, the superintendent decides to evaluate the point at which the two options will break-even: At which number of tests per year will the two options break-even?: The superintendent of a large hospital is evaluating the possible automation of one of its radiographic procedures. Currently the yearly fixed cost of the procedure is R100,000 and the variable cost is R500 per test. If the procedure is automated, the fixed cost will rise to R216,000 per year, but the variable cost will drop to R100 per test. In order to evaluate whether automation is an option, the superintendent decides to evaluate the point at which the two options will break-even: At which number of tests per year will the two options break-even?:

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o analyze whether automation is financially viablewe need to find the breakeven pointwhere the total ... View the full answer