Chris sells videos and is currently considering acquisition of distribution rights to yet to be release movie being produced by Hannah, Inc. To acquire this right, Chris needs an investment of $150,000.00. Chris estimates the total market to be 100,000 units. Other relevant financial data are provided below:

Cost of distribution rights to the movie $125,000

Label Design $5,000

Package Design $10,000

Advertising $35,000

Reproduction of copies (per 1,000) $4,000

Manufacture of labels and packaging (per 1,000) 500

Royalties (per 1,000) 500

Hannah Incs suggested retail price of the film is $20.00 per CD. Chris policy is to make a margin of 40% on each CD sold.

1. What is Chris margin?
2. What is Hannah Incs break even?
3. What share of the market would the movie capture to achieve a 20% return on Chris investment, all things being equal?