Zurich American School is an international private elementary school. In addition to regular classes, after-school care is provided between 3:00 PM and 6:00 PM at CHF 12 per child per hour. Financial results for the after-school care for a representative month are:

The director of Zurich American School is considering discontinuing the after-school care services because it is not fair to the other students to subsidise the after-school care programme. He thinks that eliminating the programme will free up CHF 1,200 a month to support regular classes.

1. Compute the financial impact on Zurich American School from discontinuing the afterschool care programme.

2. List three qualitative factors that would influence your decision.

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Revenue, 600 hours at CHF 12 per hour Less Teacher salaries Supplies Depreciation Sanitary engineering Other fixed costs Operating income (loss) CHF 6,000 800 1,300 100 200 CHF 7,200 8,400 CHF (1,200)