
I. Hospital Administration
Southwest Hospital has an operating room used only for laser eye surgery. The annual cost of rent, heat and electricity for the operating room and its equipment is $1.08 million, and the annual salaries of the people who staff this room total $1.6 million.
The cost for each surgery is $2395, which includes all medical supplies and drugs and a complimentary bouquet of flowers for each patient. In addition, one-quarter of the patients require dark glasses that the hospital provides at no additional charge but cost $20 per pair. The hospital receives a payment of 56000 for each eye operation performed.
6 If the ad campaign is approved and subsequently meets its projections, should the hospital review its decision about the machine discussed in Question 3?

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