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Ahmet Sari recently graduated from medical school. He is considering opening his own practice doctor office. A doctor's office is a high-fixed cost business, as it requires considerable expenditures for facilities, labor, and equipment, no matter how many patients are served. Assume the annual fixed cost of operations is S400,000. Further assume that the only significant variable cost relates to patients served. An average patient served costs S250. Ahmet's banker has asked a variety of questions in contemplation of providing a loan for his business.
Problem a) If Ahmet believes his profit will be at least S100,000 during the first year, how much is he anticipating for total revenue?
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