Eastman Publishing Company is considering publishing an electronic textbook on spreadsheet applications for business. The fixed cost of manuscript preparation, textbook design, and Web site construction is estimated to be $160,000. Variable processing costs are estimated to be $6 per book. The publisher plans to sell access to the book for $46 each. a. Build a spreadsheet model to calculate the profit/loss for a given demand. What profit can be anticipated with a demand of 3500 copies? b. Use a data table to vary demand from 1000 to 6000 increments of 200 to assess the sensitivity of profit to demand. c. Use Goal Seek to determine the access price per copy that the publisher must charge to break even with a demand of 3500 copies.
Eastman Publishing Company is considering publishing an electronic textbook on spreadsheet applications for business. The fixed cost of manuscript preparation, textbook design, and Web site construction is estimated to be $160,000. Variable processing costs are estimated to be $6 per book. The publisher plans to sell access to the book for $46 each. a. Build a spreadsheet model to calculate the profit/loss for a given demand. What profit can be anticipated with a demand of 3500 copies? b. Use a data table to vary demand from 1000 to 6000 increments of 200 to assess the sensitivity of profit to demand. c. Use Goal Seek to determine the access price per copy that the publisher must charge to break even with a demand of 3500 copies.
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
Section: Chapter Questions
Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...
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Eastman Publishing Company is considering publishing an electronic textbook on spreadsheet applications for business. The fixed cost of manuscript preparation, textbook design, and Web site construction is estimated to be $160,000. Variable
a. Build a spreadsheet model to calculate the
b. Use a data table to vary demand from 1000 to 6000 increments of 200 to assess the sensitivity of profit to demand.
c. Use Goal Seek to determine the access price per copy that the publisher must charge to break even with a demand of 3500 copies.
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