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The Pritzker Music Pavilion in downtown Chicago The Pritzker Music Pavilion in downtown Chicago is a technoloqically sophisticated and uniquely designed performing arts venue that
The Pritzker Music Pavilion in downtown Chicago
The Pritzker Music Pavilion in downtown Chicago is a technoloqically sophisticated and uniquely designed performing arts venue that hosts live concerts attended by over halr a millian patrons a year. A qroup or local organizers, led by a praminent local businesswoman, would like to use the pavilion for a concert to benefit Ceres, a nan-profit, national network of investors and enviranmental organizations working with companies and investors to address sustainability challenges such as global climate change. If the pavilion management agrees to host the concert, the organizers will donate all profits to Ceres (or absorb any losses) Based on the following revenue and cost information, the organizers would like answers to several questions There are three sources of revenue for the concert: 1. Tickets will be sold for $15.50 each. 2. A large multinational corparation headquartered in Chicago will donate $2.00 per ticket sald Each concert attendee is expected to spend an average of $17.00 for parking, food, and merchandise. On the expense side, there are also three components: 1. A popular national group has agreed to perform at the concert. Normally, the group demands a significant fixed fee to perform, but to reduce the nisk for the organizers, the group has agreed to perform for $5.50 per ticket sold 2. The organizers will pay several companies to operate the parking, food, and merchandise concessions. They will pay s24,00o plus 12 % of all parking, food, and merchandise revenue. 3. The organizers will pay the pavilion $95,000 plus $10.00 per ticket sold to ocover its operating expenses (production, maintenance, advertising, etc.). REQUIRED [ROUND YOUR CM ANSWER TO THE NEAREST CENT; ROUND ALL OTHER ANSWERS TO THE NEAREST UNIT OR NEAREST DOLLAR.] Part A (8 tries; 8 points) 1. What is the estimated contribution margin per ticket sold for the benefit concert? 2. What are the estimated total fixed costs for the benefit concert? Submit Anaar Tries 0/8 Part B (8 tries; 8 points) 3. what is the estimated profit from the benefit concert if 9,500 tickets are sold? 4. How many tickets must be sold in order for concert profit to be $80,000? 5. Assuming a tax rate of 30% on prafits from the concert, what must dollar ticket sales be in order for after-tax concert profits to be $80,000? Submit Asw Tries 0/8 Part C (4 tries; 4 points) 6. Assume that the organizers can negotiate the fixed portion of the pavilian's aperating expenses. If the organizers expect to sell 9,500 tickets, how much aperating fixed costs can they afford to pay and still earn a profit of $80,000 ignare taxes)? Tries 0/4 5ubmit AnavsarStep by Step Solution
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