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Last week, Outback Clinic bought a new MRI machine for $1 million. The machine will perform 500,000 test over it use for life. Total variable

Last week, Outback Clinic bought a new MRI machine for $1 million. The machine will perform 500,000 test over it use for life. Total variable cost of $five dollars per MRI, and the clinic is planning to charge $10 per MRI. This month, competing MRI manufacturer introduced a similar MRI machine for the same price. In effects, the introduction of the MRI machine made the resale or trade-in value of the existing MRI machine $0. Total variable costs are $2 per test. Using differential cost analysis, should outback clinic keep the existing MRI machine or buy the new one? 

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