McBain Tower In this scenario, the business would exercise the option of breaking its current lease for

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McBain Tower In this scenario, the business would exercise the option of breaking its current lease for a penalty of $300,000. It would then relocate to a five-story space within McBain Tower. Since most of the space is already designed well for training, Regency could make quick tweaks at an estimated cost of $150,000 and get things rolling very quickly. The lease would be a bit costlier- $300,000 a month, and the business would now need to incur added expenses of $50,000 a month for utilities. Don wants your help with projecting the other expenses. On the bright side, the business would now have sixteen rooms to work with (average size of 25 seats each). Shelly admittedly hasn't done much number crunching but believes she can boost enrollment by 25% if the marketing budget is increased by $300,000 to advertise the new larger location. Without the larger budget, she estimates that customer numbers would grow by 15% next year. Option B: BC Place With this option, Regency would rent BC Place stadium on Tuesday and Wednesday afternoons (for ten weeks of the year), at a cost of $10,000 per afternoon (four hours). Since the large stadium has two ends, Regency would run two three-hour workshops simultaneously and leave enough time for set-up and clean-up. Don envisions each of the two workshops having 150 customers each. The set-up, clean-up, and other costs (beyond rent) would be $1,000 a week. Since enrollment fees for each workshop total $150, Don believes that there would be more than enough revenue to cover the new expenses. Shelly believes that only a small marketing budget increase would be needed with the BC Place arrangement- $150,000 more would be sufficient to recruit an extra 5,000 workshop registrants. Due to the visibility and prestige of BC Place (as well as his familiarity and love for the current location), Don personally prefers Option B. However, he does admit that there is another piece needed to maximize the benefit of BC Place. A certain number of customers would need to be shuttled between BC Place and the permanent office if they are going to be able to attend courses or events at both locations on the same day. Hence, the business will need to buy or rent a large bus- this is something that management is considering anyway (for free morning and evening routes around the city to help customers out), even without the expansion to BC Place. can you help me with the analysis