CableVision has been approached by the City of Mirada to run its cable operations. After negotiating with key parties, CableVision has made the following agreements:

• It will offer Mirada residents a basic set of 25 cable television stations at a rate of $31.49 per month.
• CableVision will pay the city $1,100,000 per year plus $3.50 per cable subscriber per month to maintain the physical facilities.
• CableVision will actually pay another company a monthly fixed fee of $70,000 plus $8.00 per cable subscriber per month to broadcast the 25 channels.

CableVision estimates that operating costs for billing, program news mailings, etc. will be $130,000 per month plus 7% of monthly revenue.

CableVision has several questions about its monthly revenues, costs, and profits in 2015.

REQUIRED [ROUND YOUR ANSWER TO PART A, QUESTION 1 TO THE NEAREST CENT; ROUND ALL OTHER ANSWERS TO THE NEAREST UNIT OR NEAREST DOLLAR.] Part A (6 tries; 8 points) 1. What is the estimated monthly contribution margin per cable subscriber for CableVision in 2015? 17.7900 2. What are the estimated total monthly fixed costs for CableVision in 2015? 291667

You are correct.

Your answers are correct, but just to make sure that there are no rounding issues, use $17.79 for the estimated contribution margin per subscriber and $291,667 for the estimated monthly fixed costs in Parts B and C.

Part B (8 tries; 8 points) 3. What is CableVision's estimated monthly operating income if 17,000 residents subscribe? 10763 4. How many monthly subscribers would be required for CableVision to break even in 2015? 16395 5. How many monthly subscribers would be required for CableVision to earn $27,000 per month in 2015? 17913 6. Assuming a tax rate of 35%, what must revenue be in order for CableVision to earn $27,000 per month in 2015? 589808

You are correct.

Part C (4 tries; 4 points) 7. Some of CableVision's managers are uncertain about their estimate of monthly fixed operating costs. Assuming that 21,000 residents subscribe, how large can monthly fixed operating costs be for CableVision to still earn $27,000 per month in 2015 (ignore taxes)?

I have everything right, but the last part. Please help and show work too!! Thank you!