Question
PART 4 QUESTION 1 (8 marks) Cappadocia Balloon Rides Ltd is considering selling hot air balloon rides next year in January 2022. The following
PART 4 QUESTION 1 (8 marks) Cappadocia Balloon Rides Ltd is considering selling hot air balloon rides next year in January 2022. The following information is relevant: Lease of the hot air balloons Hot air balloon rides fee charged to a customer Fuel cost per air hot balloon rides Set up cost per air hot balloon rides $7,500,000 $1,500 $100 $200 REQUIRED: a) How many balloon rides will Cappadocia Balloon Rides Ltd need to provide in order to break-even? (show workings) (2 marks) b) Explain what the consequence/impact will be if the Cappadocia Balloon Rides Ltd has 8,460 hot air balloon rides for January 2022? (show workings) (2 marks) c) Explain what the consequence/impact will be if the Cappadocia Balloon Rides Ltd has 4,375 hot air balloon rides for January 2022? (show workings) (2 marks) d) Calculate the number of hot air balloon rides required for the Cappadocia Balloon Rides Ltd, if the business to earn a desired profit of $3,300,000. (show workings) (2 marks)
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