Question Completion Status: Doris M. Bradley has invested $1,200,000 in a small (280-seat) theatre. All of this moneyshould be considered her investment. She would like to see a 10% after-tax return on her investment in the coming year. Doris faces a personal tax rate of 38%. She expects the theatre seats to be sold at a 75% capacity on average, and that in this year the theatre will be open on 130 nights. There are many costs involved in running a theatre. Estimates indicate that variable costs will use 70% of the revenue earned by the theatre. Fixed costs would be: Salaries. $420,000 Insurance. 40,000 License. .... 15,000 Utilities... 110,000 Also, depreciation on the theatre building itself would be 10% of the building's $800,000 current book value. Part of Doris' investment (included in the $1,200,000 mentioned above) in the theatre came through a bank loan of $250,000, on which she will be paying 5% interest this year. REQUIRED: a. Please calculate the total amount of revenue that this theatre will need to earn this year, in order to meet all costs and allow for Doris' expected after-tax return. (10 marks) Click Save and Submit to save and submit. Click Save All Answers to save all answers. Save All AnQuestion Completion Status: b. Now that revenue has been calculated, please work out the tranche pricing for Doris, using the following data: 280 seats, selling at 75% capacity, open for 130 nights in the coming year, as stated above. Tranches: Tranche 1, paying 100% of top price.. 20% of tickets Tranche 2, paying 65% of top price. .. 42% of tickets Tranche 3, paying 40% of top price........ the remaining tickets (10 marks) Attach File Browse Local Files Browse Content Collection