Please do not handwrite thank you.

Little Swim School (LSS) runs swimming classes for children aged 3 15 years old. It operates out of a purpose-built indoor pool in southern Singapore. Over the years, through word-of-mouth, the school has grown to its current enrolment of 300. The indoor pool was built three years ago at a cost of $800,000, when the school first started its operations. Annual depreciation is $80,000. Monthly utilities expense is $240,000 and the receptionist is paid $2,500 per month with an additional one month bonus paid in December. The owners (the two owners who are also coaches get an equal share of 50% of profits after all expense have been deducted). Coaches are paid $3,000 per month and one month bonus paid in December. Each child at the school pays fees based on level of proficiency. Beginners pay $50 a lesson, intermediate students pay $80 per lesson, and advance students pay $90 per lesson. Each weekly class lasts 45 minutes and class size is limited to 4 students. The school operates 7 days a week on a four weeks per month schedule, with 10 coaches (including the two owners) and one receptionist. Classes start every hour between 9 am and 7 pm except between 1 to 2 pm (i.e. each instructor can take up to a maximum of nine (9) classes each day, seven days a week). Assume that every student will stay at least 12 months.

(a) Compute the breakeven point in terms of the lessons taken by students and number of students for LSS. Clearly state any necessary assumption(s) for your computations. What is the amount of the annual profit (or loss) for LLS currently?

(b)The owners of the business wants to grow the business and is considering paying a marketing company to set up a website and run marketing promotions in March. The marketing effort (including the website set up) will cost LSS a one-time fee of $95,000. The marketing company projects that this effort can increase the number of students in the beginners classes by 30%. If necessary, LLS will have to hire extra coaches in order to meet the increase in demand. Perform a quantitative analysis to determine if this plan is a good idea for LSS. What is net effect on profit for LSS if the marketing plan is executed? Clearly state any necessary assumption(s) made in your analysis

Enrolment Beginner Intermediate AdvanceTotal User of services 300 60 120 120 Number of students $80 $90 $50 Fees per lesson $84,000 S38,400$21,600 $24,000 Total monthly fees $1,008,000 Enrolment Beginner Intermediate AdvanceTotal User of services 300 60 120 120 Number of students $80 $90 $50 Fees per lesson $84,000 S38,400$21,600 $24,000 Total monthly fees $1,008,000