Question

A large research hospital is considering a new computer-based training course for lab safety. The total cost of the hospital's current training program is $80,000 per year. If the new training program will reduce these costs to $60,000 per year, what is the maximum acceptable cost to initiate the program to reach the break-even point within three years? What is the return on investment for that scenario?

Answer 1

I need that money to but new nikes

Answer 2

We have been given that total cost of the hospital's current training program is $80,000 per year.

If the new training program will reduce these costs to $60,000 per year , it will help the hospital to save $20,000 per year. So in 3 years hospital will save $60,000.

Since we know that for break-even point to occur, the savings or profit from new program should be equal to the cost of the new program.

The maximum acceptable cost to initiate the program to reach the break-even point within three years will be $3\cdot 20,000=60,000$. In 3 years there will be no profit and loss so the break-even point will happen.

Therefore,the return on the investment in this scenario will be $0.