Appalachian Dental Associates, PLC (ADA) is considering a contract from the App State Student Health Services department to provide dental services for the 20,000 App State students.

The App State Student Health Services Department has done a thorough records scan and provided ADA with the following annual utilization information.

Service	Number of services per year
Check up and cleaning	10000
Filling/ cavity repair visits	3000

Service	Variable Cost
Check up and cleaning	$40
Filling/ cavity repair visits	$125

Appalachian Dental Associates Fixed Costs are $150,000 per year.

App State Health Services is offering Appalachian Dental Associates a Contract for $4.00 PMPM. (Hint: Make sure you are measuring revenues and costs based on the same time period.)

Should ADA accept the contract? Why or why not? Make sure to fully justify your answer, including any assumptions you are making.