*A college of business at Tech is planning to begin an online MBA program. The initial start-up cost for computing equipment, facilities, course development, and staff recruitment and development is 350,000. The college plans to charge tuition of 18,000 per student per year. However, the university administration will charge the college 12,000 per student for the first 100 students enrolled each year for administrative costs and its share of the of the tuition payments.

1. If the college can enroll 50 students in the first year, how much will their fixed costs be?

2. How many students does the college need to enroll in the first year to break even?

3. The college believes it can increase tuition by $24,000, but doing so would reduce enrollment to 35 (instead of the original estimate of 75 students). Should the college consider doing this?

4. The college believes it can increase tuition by $24,000, but doing so would reduce enrollment to 35 (instead of the original estimate of 75 students). In comparing the two plans what would difference in profit be?