Question 2

The Montreal Alouettes Football Club is very disappointed with its 2021 attendance figures to-date (N.B. "attendance" is the number of fans that attend each game). So far, the number of tickets sold (i.e. the attendance) for each game has averaged 16,000. The average ticket price for each game is $80.00, and the margin on the cost is 400%.

A) If total fixed costs for each game average $1,000,000, how many tickets must they sell to break-even each game.

B) On average, how much money is the Club making (or losing) each game?

To boost attendance (and - hopefully - their bottom line), the Club is contemplating adding a spectacular half-time show (including marching bands, a star singer, etc) to their game offering. It is estimated that such an initiative would result in a 6,000 fan increase in attendance. This spectacular show would cost $300,000.

C)What would the ROMI be on such an initiative?

D)Should the Club go ahead with this initiative? Why or why not?