Consider the Profit/Loss problem presented in

problem 3.

a. Use Goal Seek to determine the access price per copy that the publisher must charge to break even with a demand of 3,500 copies.

b. Consider the following scenarios:

For each of these scenarios, the fixed cost remains $160,000. Use Scenario Manager to generate a summary report that gives the profit for each of these scenarios. Which scenario yields the highest profit? Which scenario yields the lowest profit?

Problem 3

Eastman Publishing Company is considering publishing an electronic textbook about spreadsheet applications for business. The fixed cost of manuscript preparation, textbook design, and web site construction is estimated to be

$160,000. Variable processing costs are estimated to be $6 per book. The publisher plans to sell single-user access to the book for $46.

Variable Cost/ Book Access Price Demand Scenario 1 Scenario 2 Scenario 3 Scenario 4 Scenario 5 $12 $6 $8 $10 $11 $46 $50 $40 $50 $60 2,500 1,000 6,000 5,000 2,000