Jack is considering setting up a business to deliver outdoor fitness training weekends for company executives working in London's investment banks. Each weekend course will be run for an individual bank. He has included the following details in his business plan:- Fitness weekends are expected to run for 48 weeks each year. Jack will employ a marketing consultant at an annual cost of 50,000. Jack will hire luxury hotels in the Lake District to run each course at a cost of 10,000 per weekend booking. Each course will have one fitness video, sent out to each investment bank's training department, two weeks before the course. These will be bought in by Jack, as and when needed, at a cost of 30 each. Jack's business partner, Lin, will run half of the courses each year. Jack will run the remainder. Jack will pay Lin 3,000 for each weekend course that she runs. He will pay himself the same amount. Other anticipated costs are: Annual website hosting fee 20 Advertising, per course 500 Insurance, per year 300 Each course is run for an individual bank. Jack will invoice the bank's training department 35,000 for each weekend that the bank books. The fee will be the same, no matter how many executives take part, to a maximum of eight. Required:- i. Briefly explain what is a company's margin of safety. What does it measure? ii. What will be the break-even number of weekend courses for Jack's business? a) 2 courses. b) 11 courses. c) 10 courses. d) 3 courses.

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Answer A companys margin of safety is the difference between its actual sales and its break... View the full answer