At the core of their revenue model is the membership subscription. Memberships are priced at $50 each month. In addition, they project that 25% of their active members will be attracted by the specialized training classes. These sessions are priced at $20 each, with the expectation that members will attend, on average, four sessions monthly. The chosen location for FlexPoint is a prominent spot in downtown Smithfield, guaranteeing both visibility and accessibility. While the location is strategically perfect, it does come with its financial considerations. The monthly rent for this prime spot is $15,000. The electricity bill is estimated at $2,500 monthly. Water utilities, which facilitate hydration and showers, are anticipated to cost an additional $500. Maintenance of the gym equipmenta key aspect to ensure a smooth experience for memberswill require a monthly allocation of $1,000. To attract and retain members, their marketing endeavors will have a dedicated budget of $2,000 each month. Annual regulatory obligations, including licensing and permits, come up to $12,000, and an insurance premium of $6,000 annually provides a safety net against potential mishaps. They plan to hire trainers. One trainer can work with 100 members. Each trainer will get $3,000 every month. Each front desk worker will serve 500 members and will be paid a monthly salary of $2,500 each. Three people will be hired to clean, each earning $1,500 a month. A significant initial investment is required. The bulk of the costs, estimated at $150,000, will go towards gym equipment. This includes essentials like treadmills, ellipticals, weights, resistance machines, and fitness mats. Following the equipment, the interior setup is the next major expenditure. Setting up the interiors, which includes designing the space, setting up locker rooms, arranging lighting, and adding decor, is anticipated to cost around $50,000. In addition to the physical setup, they need to establish their presence in the market. Initial marketing efforts, such as creating and printing brochures, establishing a basic website, and putting up signage for the gym, will demand an investment of about $10,000. Lastly, to ensure the team is well- prepared and knowledgeable, funds have been allocated for staff training. Certifications, training programs, or courses for the staff are expected to amount to $5,000.

1. build a financial model for the company. The analysis should be based on monthly frequency.
2. Calculate the breakeven point (in terms of number of customers per month) from your spreadsheet analysis.
3. Copy and paste your financial model onto the second worksheet. In the second worksheet, assume that the sales of earbuds depend on the price you charge, according to the following equation: Demand = 2,500 20 P; where P represents the membership fee Perform sensitivity analysis on how price change will affect profits. Try a range of prices from$40 to $100 on a $10 interval.