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Lunna [17]
3 years ago
11

A large research hospital is considering a new computer-based training course for lab safety. The total cost of the hospital's c

urrent training program is $80,000 per year. If the new training program will reduce these costs to $60,000 per year, what is the maximum acceptable cost to initiate the program to reach the break-even point within three years? What is the return on investment for that scenario?
Business
1 answer:
choli [55]3 years ago
7 0
First of all, let us calculate the annual gains: they are 80000-60000=20000$. In three years, the profit will be 3*20000=60000$. Hence, the break-even investment would be 60000$. For a year after that, the profit will be 20000$; hence the return on investment would be 20000/60000=33,33% per year. After 6 years, the investment would have yielded a 100% profit (return on investment).
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