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Q1. You are investing in a new play. You are given the following information about the play: Ln-BUJNrl 6. The xed cost of opening the

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Q1. You are investing in a new play. You are given the following information about the play: Ln-BUJNrl 6. The xed cost of opening the play is $5 million. The average ticket price is $100. The theatre seats 2000 people, and there are 365 performances per year. Variable cost of operating each performance is $1000. In order to know the protability of the play, you also need to know how many years you want to run the play, currently you are planning for 3 years, but the number is expected to change. The current occupancy rate is 80% per performance, this number is expected to change. Use a data table to determine how the total prot generated by the play varies as the length of the play run varies between 1 and 5 years, and the average occupancy rate varies between 70% and 90% (hint: prot = total revenue xed cost total variable cost). Q2. You have been assigned by a publisher to analyze the protability of a textbook that your professor wrote (the publisher is selling both the hardcover version and the paperback version). The following assumptions have been made (prot is before tax): 99FP'P'PWPT' The professor is receiving a one-time royalty payment of $12 million. The xed cost of producing the hardcover version of the book is $1 million. The variable cost of producing each hardcover book is $4. Unit price for each hardcover copy is $15. The publisher expects to sell 1 million hardcover copies (quantity demanded). The xed cost of producing the paperback is $100,000. The variable cost of producing each paperback book is $1. Unit price for each paperback copy is $4 Paperback's quantity demanded = paper back sales to hardcover sales ratio * quantity demanded for hardcover version (assume that the paper back sales to hardcover sales ratio = 2 initially and is expected to change) Please determine the following: a. Determine how the publisher's before-tax prot will vary as hardcover sales (quantity demanded for hardcover copies) vary from 100,000 through 1 million copies. b. Determine how the publisher's before-tax prot varies as hardcover sales vary from 100,000 through 1 million copies and the ratio of paperback to hardcover sales varies from 1 through 2.5. 0. Determine how the publisher's before-tax prot will vary as hardcover sales vary from 100,000 through 1 million copies and paperback sales vary from 200,000 through 2 million copies

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