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consortium of Sail group and French-based Stade de France had a service contract to operate Cape Town Stadium. Cape Town municipality paid the consortium to

consortium of Sail group and French-based Stade de France had a service contract to operate Cape Town Stadium. Cape Town municipality paid the consortium to operate the stadium during the World Cup. After, the consortium leased the stadium from the city. The lease contract has to be at least 10 years and no more than 30 years. If the revenue for each match-day is $200,000 and the variable cost associated with each match is $40,000. Moreover, fixed administration overheads is $400,000 per year and the average number of match-day per year is 100 matches with leasing cost of $10,000,000 per year.

We are required to find:

The contribution margin for each match will be:

a.

$160,000

b.

$190,000

c.

$168,000

d.

$200,000

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