The museum currently has a $30 million endowment, but it also has substantial operating costs and continues to add to its eclectic collection that encompasses paintings, photographs, drawings, and design objects post-1900. Annual earnings from the endowment (approximately $2,500,000 in 2010) are not sufficient to cover operations and acquisitions, and the museum€™s trustees and president are conscious of the need to generate income from admissions, special exhibits, and museum store sales.

Required
a. Prepare an analysis of the financial impact of the exhibition on the Rothmueller Museum, assuming attendance is 10,000.Does offering the exhibition appear to be a good decision from a financial standpoint?
b. How many people must attend the exhibition for its financial impact to be profit neutral (i.e., the museum will not be better or worse offfinancially)?

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Revenue (10,000 × $15) Less: $150,000 1 Lease of photographs from other museums and collectors 100,000 Packing and transportation of photographs from other museums and collectors 5,000 4,000 Event insurance 4 Alice Morgan salary (25%) 15,000 William Jacob salary (25%) 13,000 Guard service Installation costs Advertising Exhibition printed programs 4,000162,000 10 12,000 2,000 7,000 Profit (loss) (S 12,000)