BREAK EVEN ANALYSIS

Sure Care Health Maintenance Organization is seeking a managed care contract with a local manufacturing plant.

Sure Care estimates that the cost of providing preventative and curative care for the 300 employees and their families will be $36,000 per month.

The manufacturing company offered Sure Care a premium bid of $200 per employee per month.

If Sure Care accepts this bid and contracts with the manufacturing firm, will Sure Care earn a profit or loss for the year? How much?

Describe the steps you used to solve this question.

150 words

Discussion 2

Minimizing Errors in Projections

Break even analysis utilizes both current and projected figures. In a rapidly changing economy, there are many individuals who are finding that their initial break-even analyses were incorrect.

In your opinion, what could be done to minimize errors in projections?