Pretend the an observation unit is being built in a metropolitan area, consider your own allocated size and the hospital experiences the exact same demand rate. In addition, the npatient beds that were formerly occupied by ER Observation patients will now be filled by inpatients (for instance at the same LOS and profit/patient rate). Don't take into account the fixed and variable costs to build the unit, therefore, what would be the benefit in $/day to the hospital for having the observation unit relative to the status quo?