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Preliminary plans are underway for construction of a new stadium for a major league baseball team. City officials question the number and profitability of the luxury corporate boxes planned for the upper deck of the stadium. Corporations and selected individuals may purchase a box for $275000. The fixed construction cost for the upper - deck area is estimated to be $ 4500000, with a variable cost of $125000 for each box constructed. a) What is the breakeven point for the number of luxury boxes in the new stadium? Breakeven point --- luxury boxes? b) Preliminary drawings for the stadium show that space is available for the construction of up to 49 luxury boxes. Promoters indicate that buyers are available and that all 49 could be sold if constructed. What is your recommendation concerning the construction of luxury boxes? What profit is anticipated? Profit = ?

Preliminary plans are underway for construction of a new stadium for a major league baseball team. City officials question the number and profitability of the luxury corporate boxes planned for the upper deck of the stadium. Corporations and selected individuals may purchase a box for $275000. The fixed construction cost for the upper - deck area is estimated to be $ 4500000, with a variable cost of $125000 for each box constructed. a) What is the breakeven point for the number of luxury boxes in the new stadium? Breakeven point --- luxury boxes? b) Preliminary drawings for the stadium show that space is available for the construction of up to 49 luxury boxes. Promoters indicate that buyers are available and that all 49 could be sold if constructed. What is your recommendation concerning the construction of luxury boxes? What profit is anticipated? Profit = ?

Practical Management Science
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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Preliminary plans are underway for construction of a new stadium for a major league baseball team. City officials question the number and profitability of the luxury corporate boxes planned for the upper deck of the stadium. Corporations and selected individuals may purchase a box for $275000. The fixed construction cost for the upper - deck area is estimated to be $ 4500000, with a variable cost of $125000 for each box constructed. a) What is the breakeven point for the number of luxury boxes in the new stadium? Breakeven point --- luxury boxes? b) Preliminary drawings for the stadium show that space is available for the construction of up to 49 luxury boxes. Promoters indicate that buyers are available and that all 49 could be sold if constructed. What is your recommendation concerning the construction of luxury boxes? What profit is anticipated? Profit = ?
Transcribed Image Text:Preliminary plans are underway for construction of a new stadium for a major league baseball team. City officials question the number and profitability of the luxury corporate boxes planned for the upper deck of the stadium. Corporations and selected individuals may purchase a box for $275000. The fixed construction cost for the upper - deck area is estimated to be $ 4500000, with a variable cost of $125000 for each box constructed. a) What is the breakeven point for the number of luxury boxes in the new stadium? Breakeven point --- luxury boxes? b) Preliminary drawings for the stadium show that space is available for the construction of up to 49 luxury boxes. Promoters indicate that buyers are available and that all 49 could be sold if constructed. What is your recommendation concerning the construction of luxury boxes? What profit is anticipated? Profit = ?
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