Garner Strategy Institute (GSI) presents executive-level training seminars nationally. Eastern University (EU) has approached GSI to present 40 one-week seminars during 2016. This activity level represents the maximum number of seminars that GSI is capable of presenting annually. GSI staff would present the week-long seminars in various

cities throughout the United States and Canada.

Terry Garner, GSI's president, is evaluating three financial options for the revenues from Eastern: accept a flat fee for each seminar, receive a percentage of Eastern's profit before tax from the seminars,and form a joint venture to share costs and profits.

Estimated costs for the 2016 seminar schedule follow

Garner Strategy Institute Eastern University

Fixed costs for the year:

Salaries and benefits $200,000 N/A*

Facilities 48,000 N/A*

Travel and hotel 0 $210,000

Other 70,000 N/A*

Total fixed costs $318,000 $210,000

Variable costs per participant:

Supplies and materials 0 $47

Marketing 0 18

Other site costs 0 35

*Eastern's fixed costs are excluded because the amounts are not considered relevant for this decision (i.e., they will be incurred whether or not the seminars are presented). Eastern does not include these costs when calculating the profit before tax for the seminars.

EU plans to charge $1,200 per participant for each one-week seminar. It will pay all variable marketing,site costs, and materials costs.

1. A comparison of the breakeven points for the second and third options (% of the profit/joint venture)
2. The indifference point (in number of participants) between:

• Flat fee and percentage of profit
• Flat fee and joint venture
• Percentage of profit and joint venture

3.A discussion of qualitative factors that should be considered before a final decision is maade.

4.At least one graph to demonstrate your findings