Breakeven point for the number of luxury boxes

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Reference no: EM131164770

Officials have questioned the number and profitability of the luxury corporate boxes planned for the upper deck of the stadium. Corporations and selected individuals may buy the boxes for $300,000 each. The fixed construction cost for the upper-deck area is estimated to be $4,500,000, with a variable cost of $125,000 for each box constructed.

a. What is the breakeven point for the number of luxury boxes in the new stadium? Round your answer to the nearest whole number.

Breakeven point = ______luxury boxes

b. Preliminary drawings for the stadium show that space is available for the construction of up to 45 luxury boxes. Promoters indicate that buyers are available and that all 45 could be sold if constructed. What is your recommendation concerning the construction of luxury boxes?

In order to maximize profits, the recommendation is to build 45 luxury corporate boxes .

What profit is anticipated? Round your answer to the nearest dollar.

Profit = $ _________

Reference no: EM131164770

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