Hi,,

May you assist/explain the following-

1. You are a radiologist trying to decide whether or not to buy an open MRI

machine. The machine costs $2.6 million. You believe you can charge a premium for

an open MRI and can realistically get $1,500 per scan. The cost of labor for your

tech is about $150 per scan, as well as the value of your own time, which you put at

$200.

a. What is the break-even quantity of scans to pay for the MRI machine? --- I did this but not sure: 2.6 mil/1500-350=2,261

b. A few months after you purchase the machine, you realize that the revenue model

is more complex. Although your costs estimates were correct, your revenue comes

at three different levels: you get $1,500 per scan for privately insured patients;

$1,100 for Medicare patients; and $650 for Medicaid patients. The breakdown of

your patient group is about 55 percent privately insured; 30 percent Medicare; and

15 percent Medicaid. Now, what is the break even quantity?