Copy Cat Company Case Study Report

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Eastman Publishing Company is considering publishing an electronic textbook about spreadsheet applications for business. The fixed cost of manuscript preparation, textbook design, and web-site construction is estimated to be $175,000. Variable processing costs are estimated to be $8 per book. The publisher plans to sell single-user access to the book for $54. (a) Build a spreadsheet model in Excel to calculate the profit/loss for a given demand. What profit can be anticipated with a demand of 3,300 copies? For subtractive or negative numbers use a minus sign. -23,200 (b) Use a data table to vary demand from 1,000 to 6,000 in increments of 200 to test the sensitivity of profit to demand. Breakeven occurs where profit goes from a negative to a positive value, that is, breakeven is where total revenue = total cost yielding a profit of zero. In which interval of demand does breakeven occur? (i) Breakeven appears in the interval of 3,400 to 3,600 copies. (ii) Breakeven appears in the…

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Eastman Publishing Company is considering publishing an electronic textbook about spreadsheet applications for business. The fixed cast of manuscript preparation, textbook design, and web-site construction is estimated to be $155,000. Variable processing costs are estimated to be $6 per book. The publisher plans to sell single-user access to the book for $47. (a) Build a spreadsheet model in Excel to calculate the profit/loss for a given demand. What profit can be anticipated with a demand of 3,200 copies? For subtractive or negative numbers use a minus sign. -23800 (b) Use a data table to vary demand from 1,000 to 6,000 in increments of 200 to test the sensitivity of profit to demand. Breakeven occurs where profit goes from a negative to a positive value, that is, breakeven is where total revenue - total cost yielding a profit of zero. In which interval of demand does breakeven occur? (1) Breakeven appears in the interval of 3,200 to 3,400 copies. (1) Breakeven appears in the interval…

Garner Strategy Institute (GSI) presents executive level training seminars nationally. Eastern University (EU) has approached GSI to present 40 one-week seminars during 2013. This activity level represents the maximum number of seminars that GSI is capable of presenting annually. GSI staff would present the week-long seminars in various cities throughout the United States and Canada. Terry Garner, GST's president, is evaluating three financial options for the revenues from Eastern: accept a flat fee for each seminar, receive a percentage of Eastern's profit before tax from the seminars, and form a joint venture to share costs and profits. Estimated costs for the 2013 seminar follow: Fixed costs for the year: Salaries and benefits Facilities Travel and hotel Other Total fixed costs: Variable costs per participant Supplies and materials Marketing Other site costs Garner Strategy Institute Eastern University $200,000 N/A 48,000 N/A 0 $210,000 70,000 N/A $318,000 $210,000 0 $47 0 18 35…

Medical Experts Inc. is considering to contract an outside company to supply medical equipments for its clients. Medical Experts' managers want to make a decision of choosing between two suppliers who will be contracted for a period of 4 years. The following are the details of the two options:   Supplier Initial Investment Annual Cash Flow Period in years Supplier 1 $150,000 $50,000 4 Supplier 2 $100,000 $25,000 4 Please answer the following questions: a. What is the Payback period for each of the two options? b. What is the Net Present Value for each of the two options if the expected rate of return is 10%? c. Which supplier do you think Medical Experts Inc. should choose?

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Subject management accoun Please help solve all.. please A company is planning to purchase 90,800 units of a particular item in the year ahead. The item is purchased in boxes each containing 10units of the item, at a price of $200 per box. A safety inventory of 250 boxes is kept. Besides, the company estimates to be charged the transporation cost of $15 per order. It should be assumed that ordering costs change in proportion to the number of orders place. The cost of holding an item in inventory for a year (including insurance, interest and space costs) is 15% of the purchase price. The cost of placing and receiving orders is to be estimated from cost data collected relating to similar orders, where costs of $5,910 were incurred on 30 orders. It should be assumed that ordering costs change in proportion to the number of orders placed. 2% should be added to the above ordering costs to allow for inflation. Assume that usage of the item will be even over the year. Required a. Calculate…

Assume that a prospect is interested in purchasing 4 tickets in a 20-game season ticket package. The prospect estimated that the sales force can close 20% of the deals after attending a game with an average of 1.5 transactions per customer. On average, those sales will be approximately $1,500. Assuming the cost of the package is $10,000, calculate the return on investment for the business. would like you to identify the following: • Total number of tickets in the ticket package? • Assuming the prospect will send 1 sales person to each game, how many tickets will they use in total for their potential customers? • How many customers will they gain using 20% as a conversion rate ? • Total number of transactions from customers ? • Total Revenue Generated ? • Return on Investment ? Explain how you arrived at your final numbers.

To generate leads for new business, Gustin Investment Services offers free financial planning seminars at major hotels in Southwest Florida. Gustin conducts seminars for groups of 25 individuals. Each seminar costs Gustin $3000, and the average first-year commission for each new account opened is $4600. Gustin estimates that for each individual attending the seminar, there is a 0.01 probability that he/she will open a new account.   Determine the equation for computing Gustin’s profit per seminar, given values of the relevant parameters. Round your answers to the nearest dollar.Profit = (New Accounts Opened × $  fill in the blank 1) – $  fill in the blank 2 What type of random variable is the number of new accounts opened? (Hint: Review Appendix 16.1 for descriptions of various types of probability distributions.)The number of new accounts opened is a     random variable with fill in the blank 4 trials and fill in the blank 5 probability of a success on a single trial. Assume that the…

To generate leads for new business, Gustin Investment Services offers free financial planning seminars at major hotels in Southwest Florida. Gustin conducts seminars for groups of 25 individuals. Each seminar costs Gustin $3000, and the average first-year commission for each new account opened is $5800. Gustin estimates that for each individual attending the seminar, there is a 0.01 probability that he/she will open a new account.   Determine the equation for computing Gustin’s profit per seminar, given values of the relevant parameters. Round your answers to the nearest dollar.Profit = (New Accounts Opened × $(          ) – $ (    )  What type of random variable is the number of new accounts opened? (Hint: Review Appendix 16.1 for descriptions of various types of probability distributions.)The number of new accounts opened is a   random variable with fill in the blank 4 trials and fill in the blank 5 probability of a success on a single trial. Assume that the number of new accounts…

Calico Restaurants is planning to create a new online meals-to-order service and has estimated that creating it will have the following effects on its operations: a. Annual revenues will increase from $800,000/year to $1,300,000/year, for the next 3 years. b. While the restaurant earns an EBITDA margin (EBITDA as percent of sales) of 30% currently, it expects to earn an EBITDA margin of 40% on just its incremental online sales. c. The tax rate is 20% and the appropriate cost of capital for online restaurant businesses is 12%. Assuming that there will be an initial cost of $450,000 for creating the service, which will be depreciated straight line over 3 years to a salvage value of zero, estimate the NPV for the investment. a. 112,365 b. 9,865 C. -2,354 d. 6,348