6.) Assume that the company expects ticket sales to decline 20% next year with no change in ticket price. Prepare forecasted financial results for next year following the format of the contribution margin income statement as shown above (assume a 32% tax rate, and that any loss before taxes ylelds a 32% tax savings). American Cinema Theatre Alternativo 2 - 30 Equipment ACT is thinking about installing digital projection equipment. This type of advanced technology would help the theatre differentiate itself from its competitors. This projection equipment would allow the theatre to offer a premium movie viewing experience to its audience and show 3D movies, meaning higher ticket prices. Also, the new equiment would raise variable acquisition costs. However, the equipment would increase feed costs by $350,000, which represent one time purchase and installation costs. This whernative is exclusive of alternative 1-to use the original financial information from page also shown below to calculate the efects of the new equipment. Sales Variable costs Contribution margin Foxed costs Income before Income taxes (32) Net income $ 960,000 540.000 320,000 140,000 180.000 5 $122.400 Amon The woud wow ACT crease the posts 1750 would moves the cont pe by 150. Anem 10.000 Coworode. Domus home to elegate Aditional Information This emaile would low ACT to increase the prices to $17.50 and would increase the variable cost per unit by $1.50. Assumed sales remain at 30.000 6.) Assume that the company expects ticket sales to decline 20% next year with no change in ticket price. Prepare forecasted financial results for next year following the format of the contribution margin income statement as shown above (assume a 32% tax rate, and that any loss before taxes ylelds a 32% tax savings). American Cinema Theatre Alternativo 2 - 30 Equipment ACT is thinking about installing digital projection equipment. This type of advanced technology would help the theatre differentiate itself from its competitors. This projection equipment would allow the theatre to offer a premium movie viewing experience to its audience and show 3D movies, meaning higher ticket prices. Also, the new equiment would raise variable acquisition costs. However, the equipment would increase feed costs by $350,000, which represent one time purchase and installation costs. This whernative is exclusive of alternative 1-to use the original financial information from page also shown below to calculate the efects of the new equipment. Sales Variable costs Contribution margin Foxed costs Income before Income taxes (32) Net income $ 960,000 540.000 320,000 140,000 180.000 5 $122.400 Amon The woud wow ACT crease the posts 1750 would moves the cont pe by 150. Anem 10.000 Coworode. Domus home to elegate Aditional Information This emaile would low ACT to increase the prices to $17.50 and would increase the variable cost per unit by $1.50. Assumed sales remain at 30.000
