It will cost $3 million to develop the show. There are eight performances per week...
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Accounting
It will cost $3 million to develop the show. There are eight performances per week (on Saturday there is a matinee) and we expect the show to run for 52 weeks. It costs $800 to open up the theatre each day. Tickets sell for $75.00 each and we earn an average of $5.50 profit for every ticket sold from concessions. The theater holds 1200 seats and we expect somewhere between 75% and 85% of the seats to be sold for each performance. Use excel to do all calculations.
a. Set up a spreadsheet model to compute the total profit for the entire run of the musical and total profit for each performance. Note: the % of seats sold is an uncertain variable.
b. Use a one-way table to show the sensitivity of profit (entire run) to the percentage of full seats use values of 70, 75, 80, 85, and 90%. Graph the results of your table.
c. Use a two-way table to show the sensitivity of profit (entire run) to the average ticket price and the number of weeks the play runs. Use values of $55, 60, 65, 70, 75, and 80 for ticket prices and values of 40, 50, 60, and 70 for the number of weeks.
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