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Rothmueller Museum In 1928, Francis Rothrnueller, a Northwest railroad magnate, established an endowment to fund the Rothmueller Museum in Toronto. The museum currently has a $30 million endowment, but it also has substantial operating cost and continues to add to its eclectic collection that encompasses paintings, photographs, drawings. and design objects post 1900. Annual earnings from the endowment [about $2.5 million in 2016] 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. Alice Morgan, photographic curator, is in the process of planning an exhibition of Tommy Thomson photographs that will run from September through November 2017'. Below is preliminary budget, prepared by Alice, of revenue and costs association with the exhibition. Revenue: {10,000 @ 315 perticketj Less: Lease of photographs from other museums and collectors $100,000 Packing and transportation of photographs from other Museums and collectors 5,000 Event insurance 4,000 Alice Morgan salary.r {25% allocated to this exhibition) 15,000 William Jacob salary (25% allocated to this exhibition] 13,000 Guard service 12,000 Installation costs 2,000 Advertising 7,000 Exhibition printed programs 4,000 Total costs Projected profitfoss] 3150,00 0 bi ii $162,000 {12,000} a. Estimated attendance is 10,000 and admission is SlE/ticket b. Some photographs will come from the Rothmueller collection while others will be leased from other museums and collectors. c. Cost of packing and transportation to and from Rothmueller. d. Insurance to cover photographs during the run of the exhibition. e. 25% of annual salary for Alice Morgan, head photography curator. f. 25% of annual salary for William Jacob, assistant photography curator. g. Cost of guard service for the exhibition. h. Painting of exhibition room to offwhite background. a. Advertising in newspapers and public radio. 1'. Cost of programs describing the work of Ansel Adams and pictures at exhibition. Additional Information In preparing the budget, Alice assigned 25% of her salary and her assistant's annual salaries to the exhibition since they will each spend approximately 3 months on the project. An admission fee of S6 is charged to enter the museum, and attendance at the exhibition is an additional 515 per person. About one fifth of the individuals who are estimated to attend the exhibition would have come to the museum whether the exhibition was being held or not. (Alternatively, fourfifths of the individuals are coming specically to attend the exhibition). Analysis of prior data indicates that 20% of individuals make a purchase at the museum store, and the average purchase price is SB. The store has a 30% gross margin [sales minus cost of sales] and profit (sales minus cost of sales minus staff salaries and other operating costs] per dollar of sales of 5%. a. Prepare an analysis ofthe nancial impact ofthe exhibition on the Rothmuellar, assuming attendance of 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 prot neutral (i.e.. the museum will not be better or worse financially]

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