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Calculate the number of customers required in order

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Question - 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.

Reference no: EM133135334

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