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DrBertin Performs a Certain Routine Surgical Procedure at Her Medical

question 77

Essay

Dr.Bertin performs a certain routine surgical procedure at her medical clinic.Her monthly fixed operating costs are $12,000,while her after-tax operating income is $8,000 when she performs 200 such procedures in a month.Dr.Bertin's before-tax operating income is subject to a marginal tax rate of 60%.
Required:
a)What is the margin of safety percentage for Dr.Bertin,assuming she performs 200 procedures?
b)What is the degree of operating leverage for Dr.Bertin,again assuming she performs 200 procedures?


Definitions:

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A condition in which a man is unable to achieve or maintain an erection suitable for sexual intercourse.

BPH

Benign Prostatic Hyperplasia, a condition in men in which the prostate gland is enlarged, leading to urinary problems.

PSA

Prostate-Specific Antigen, a protein produced by the prostate gland, levels of which are used to screen for and monitor prostate cancer.

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To remove the testicles of a male animal or person, leading to sterilization and the cessation of certain hormone production.

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