Question

Problem 1-15 (Algorithmic) Preliminary plans are under way for the construction of a new stadium for a major league baseball team. City 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 $350,000 each. The fixed construction cost for the upper deck area is estimated to be $4,475,000, with a variable cost of $150,000 for each box constructed. a. What is the breakeven point for the number of luxury boxes in the new stadium? Round your answer to the nearest whole number. Breakeven point = luxury boxes b. Preliminary drawings for the stadium show that space is available for the construction of up to 46 luxury boxes. Promoters indicate that buyers are available and that all 46 could be sold if constructed. What is your recommendation concerning the construction of luxury boxes? In order to maximize profits, the recommendation is to build 46 luxury corporate boxes What profit is anticipated? Round your answer to the nearest dollar Profit-$ Feedback Ched. My Work Partially correct

Answer 1

Total cost ofconstruetion of xboxes 447500D+IS0 Oo0 Revenue om x bors- 350000x AL horeak even pornt, 4475000t 156000 350 000 22.37S Breakeven pornt 122160xes Profit Revenue- Cost = 3s0o00x46- [4475000+ (50000x4 $47 25000