Solitude school is developing new in-company financial programs that are going to be offered to several companies during the next year. Careers Departments has provided information about former MBA students who could recommend these new programs to the Human Resources departments in their current companies.

The purpose of these new programs is to provide basic financial training to the key / top employees that the Human Resources Department is going to decide.

In the beginning, these programs are planned as a only day talk -always on Saturdays- (7 hours) mixed with exercises and financial documents and articles. The initial price for the program is 7.000 euros / each one.

The associate professor hired to teach these programs is Calvin Morgan (he is going to earn 5.100 euros per program)

The Solitude auditorium was booked to be used for these programs, as it was impossible to forecast a number of employees attending the program (companies expressed different criteria). It was also hired a cleaning company which is going to clean the auditorium after each program (225 euros / cleaning).

Solitudehired a catering company that is going to provide coffee & sandwiches during the coffee-break ( 300 euros / program)

Other costs related to the programs are: a) Annually checking of exercise and learning documents (5.500 euros), maintenance of the auditorium (44.000 euros) and maintenance of equipments (computers / screens, ...) was 6.000 euros.

1. What is the Breakeven Point?
2. What is the Contribution Margin? What is the Contribution Margin Ratio?
3. How many programs must be sold to obtain a profit of 175.000 euros?
4. What if these 175.000 euros are after taxes -30%-?
5. If IE decides to invest 170.000 euros in marketing & advertising, the number of sold programs is going to be around 300. What does IE should do?
6. The cleaning company that cleans the auditorium after the programs, has hired two employees (900 euros / month each one of them. The cost of the cleaning materials is 35 euros per cleaning. What is the Breakeven point?