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The variable costs (direct labor) of a non-profit organization is $5 million. At present 200,000 customers are served in return for a revenue of $20

  1. The variable costs (direct labor) of a non-profit organization is $5 million. At present 200,000 customers are served in return for a revenue of $20 million. The manager considers making an investment which will increase annual fixed costs by $1 million; but will decrease direct labor costs by 20 percent. Calculate the number of customers required in order to justify the investment project on an economic basis. (the price paid by the customer is assumed to be constant).

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