General Hospital, a not-for-profit acute care facility, has the following cost structure for its inpatient services: Fixed costs $1,093,754 Variable cost per inpatient day $19 Charge (revenue) per inpatient day $105
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General Hospital, a not-for-profit acute care facility, has the following cost structure for its inpatient services:
Fixed costs | $1,093,754 |
Variable cost per inpatient day | $19 |
Charge (revenue) per inpatient day | $105 |
The hospital expects to have a patient load of 1,599 inpatient days next year. Assume that 18 percent of the hospital's inpatient days come from a managed care plan that wants a 27 percent discount from charges. What is the change in profit if the hospital accepts the proposal?
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