Question

(b) University of Manitoba is opening a brand new health club and studio (HCS) near Arthur V. Mauro Residence Hall. The health club which will have exercise and workout equip ment, basketball courts, swimming pools, an indoor walking/running track, and tennis courts is one of the amenities UofM are building to attract new students to live on campus The studio will be equipped with brand new combination machine called t This sleek machine combines the most effective will be a full-body sculpting, fast-paced workout that incorporates both strength training and cardio he FLEXformer pieces of Pilates equipment. The result University of Manitoba wants HCS to at least break even in the first year of operation The annual fixed cost for the building, equipment, utilities, staff, and so on is $875,000, and annual variable costs are $200 per member for things like water, towels, laundry, soap, shampoo, and other member The membership fee is $225 per month. How many students will the health club need annually to break even. If HCS doubles its break-even membership after a year, what will its profit be. LA) 弔-E ,了.co» s4udcnts

Answer 1

Minimum of $350 to 400 students required to break the even.

If HCS doubles its break even membership after a year its profit would be $21,70,000.