General Hospital, a not-for-profit acute care facility, has the following cost structure for its inpatient services:
Fixed costs $1017296
Variable cost per inpatient day $22
Charge (revenue) per inpatient day $97
The hospital expects to have a patient load of 1390 inpatient days next year. Assume that 20 percent of the hospital's inpatient days come from a managed care plan that wants a 26 percent discount from charges. What is the change in profit if the hospital accepts the proposal?