NLR Productions, Ltd., is promoting a rock concert in London. The bands will receive a flat fee of 8 million in cash. The concert will be shown worldwide on closed-circuit television. NLR will collect 100 percent of the receipts and will return 30 percent to the individual local closed-circuit theatre managers. NLR expects to sell 1.1 million seats at a net average price of 13 each. NLR will also receive 300,000 from the London arena (which has sold out its 19,500 seats, rang- ing from 150 for box seats to 25 for general admission, for a gross revenue of 1.25 million); NLR will not share the 300,000 with the local promoters. 

1. The general manager of NLR Productions is trying to decide what amount to spend for advertising. What is the most NLR could spend and still break even on overall operations, assuming sales of 1.1 million tickets? 

2. If NLR desired an operating income of 500,000, how many seats would have to be sold? Assume that the average price was 13 and the total fixed costs were 9 million.