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Trinity hospital evaluated an extension to its main building to house an MRI machine. The building and equipment are expected to cost $10 million. The

Trinity hospital evaluated an extension to its main building to house an MRI machine. The building and equipment are expected to cost $10 million. The machine is expected to run 20 procedure per day at $1,000 net patient revenue per procedure. The salvage value of the building and equipment is $5 million. The NPV is positive. As a follow up, Trinity Hospital did a sensitivity analysis on number of procedures, average revenue per procedure, and the equipment salvage value. The results follow:

Number of Procedures Avg Revenue per Procedure Building & Equipment Salvage Value
-30% (2,006,852) (2,727,320) $316,191
-20% (1,046,228) (1,526,540) 502,467
-10% (85,604) (325,760) 688,744
0% 875,020 875,020 875,020
10% 1,835,644 2,075,800 1,061,296
20% 2,796,268 3,276,580 1,247,573
30% 3,756,892 4,477,360 1,433,849

According to the analysis, which of the following is closest to the breakeven revenue per procedure?

A)$1,100

B) There is no breakeven revenue per procedure.

C) -$300,000

D)$300,000

E) $700

F) $85,050

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