Indifference Analysis under Uncertainty (L.O.2): Fanzole Corporation has a patent on a new medical device selling for $14 per unit. However, demand for the device is uncertain. The company can build its own manufacturing facilities and incur variable costs of $4 and fixed costs of $1.2 million per year. On the other hand, the company could hire a subcontractor who would meet the demand for a variable cost of $12 per unit and no fixed costs.

Required: Ignoring risk, at what demand level would management be indifferent between the alternatives?