I have some questions about the case study in the word doc.

Please pay attention to those parts in red, because they are the additional information which really confused me.

XL, Inc. is a summer tourist attraction company on the Y lake. It operates a sailing schooner offering day cruises for individuals and groups. Over the last few years, the average number of tourists per cruise was 30. The average charge per person for the cruise, including group discounts, was $100. The company operates from mid-May until mid-September. On average, the ship sails 100 days during this period. The C star (the name of the schooner) requires a crew of 6 and is captained by the owner of the company. University students with extensive sailing experience have been willing to work on a per diem basis of $100. They are paid only if the ship is cruising. The ship provides non-alcoholic refreshments and a light lunch. These are required daily from a local delicatessen and cost, on average, $25 per person. The daily operating expenses, fuel and miscellaneous supplies average $50 a cruise. The company has a variety of annual expenses including: maintenance, depreciation, marketing, licenses, etc., totaling approximately $85,000. In addition to the given laid out in the original case, you must consider the following information and incorporate them in your case analysis and responses: a) In addition to the existing annual expenses, the cruise company had just entered into a lease agreement to acquire a ticketing machine (under a capital lease) from XY Lease, Inc., a leasing company for electronics. The term of the lease is for 5 years so is the useful life of leased asset. The Present Value of the leased asset (this is the depreciable base) is $20,000. The lease calls for $2,000 fixed lease amount per month regardless of the tickets produced, and $0.10 per ticket produced to travellers. This cost is not passed through to the ticket cost charged to travelers of $100 per ticket. b) The cruise ship's remaining useful life is 5 years with annual depreciation of $10,000. Case Study Questions 1. Compute the revenue, variable expense and contribution margin for each cruise. 2. Compute the number of cruises the Canadian must have each year to break-even. 3. The owner expects a target profit of $100,000. Using the concept of \"contribution margin\" and a cost volume-profit analysis, estimate how many cruises the Canadian needs to make to reach this objective? Is this a realistic expectation? Explain your answer. 4. Prepare contribution margin income statements for Sailing Voyages Inc. using 20, 50, 75, 100, and 150 cruises. 5. Prepare a Cost-Volume-Profit graphs depicting the results in # 4 above. 6. If the cruise company advertises for its services on TV, it will incur $20,000 in advertising costs for the year. Advertising is anticipated to generate a 20% growth in sales. The company's operating leverage factor is 5. Should the company commit for such a discretionary cost? And why? 7. Prepare a brief memo (no more than 2 page long) explaining the results of your analysis. Use standard business memo format. Make sure your memo includes the recommendations you will present to the owner of Sailing Voyages, Inc. to accomplish his goal of $100,000 target profit per year with 100 sailings (cruises) per year