Ms. Layla Abdullah and four of her friends have established the first Knowledge caf in the Gulf region. In addition to the restaurant in which they are providing the most famous Italian food and drinks, they are providing three different academic services. They have three halls for conducting presentations and workshops and one very big library. Both on-line and physical academic materials such as journals, books and researches are provided in the library.

Table (1) was created by Ms. Layla, the Investment Manager of the Knowledge Caf. This table presents a good estimation for the prices of Knowledge Caf of the Year 2008 in addition to the expected growth rates. As shown in Table (1), there are three main resources for the revenue of the Knowledge Caf'.

Table (1)

	Price in BD	Growth rate
Library materials	70 per library materials	10%
Restaurant	40 per customer	12%
Academic events	250 per academic event	5%

Ms. Sameera Ahmed, the Strategic Analyst of the caf has conducted several studies on the current and future situation of the caf, and she came up with some assumptions on the relationships between the demand of the library materials, customers, and academic events and their price. Sameera found that the number of library materials has a linear relationship with the price of the library materials as shown in Table (2). However, the relationship between the number of customers of the restaurant and the price and that between the Hall rent for academic event and the price are non-linear as shown in Table (3) and Table (4).

Table (2)

Library Materials
Price in BD	Number of customers
40	170
70	160
90	130
110	120
150	110
190	90
250	70

Table (3)

Caf
Price in BD	Number of customers	Variable cost
0	0	0
10	4000	9870
30	2800	8560
70	2100	6708
90	1950	6008
110	1500	4500

Academic Events
Price in BD	Number of academic events	Variable cost
150	70	8000
180	65	7800
220	55	6500
260	50	5500
300	41	5000
350	35	4780

Table (4)

Table (3) and Table (4) also indicate that there is a strong relationship between the number of the restaurant customers and the variable cost, and between the number of academic events and the variable cost. The variable cost of the library material is BD 20 and is expected to be grown at a rate of 5%. Sameera as well, has prepared some analysis on the monthly fixed cost for the Caf' as shown in Table (5).

Table (5)

	Cost in BD
Building rent	2000
Electricity and internet rent	400
Salary	3000
Others	2000

According to the investigation which was done by Ms. Layla , all the fixed cost items will be the same during the coming five years except the building rent which is expected to be grown at a rate of 15%.

• Use Table (3) to develop an XY-Function to describe the number of customers shown as a function of price and the variable cost as a function of number of customers.
• Use Table (4) to develop a Cubic Function to describe the number of academic events as a function of price and the variable cost as a function of number of academic events.
• Develop an Excel model that computes profits over the next five years (starting from year 2008) and then discounts those profits back to todays dollars by using the following discount rates: 4%, 8%, 12%, and 16%
• To help Ms. Layla the Investment Manager, in estimating a good price for Knowledge Caf' services, find at what price (library materials, restaurant, academic events) the Knowledge Cafe' will reach a higher profit by BD 4000 in the year 2011 than the profit of the year 2010.