ANSWER BY SETTING UP A CHART!!!!!

You have been asked to analyze the profitability of releasing a new music album by a hair metal band from 1980s. You have been able to collect the following information:

• The band is expecting a one-time royalty payment of $12 million.
• The fixed cost of producing a CD version of the book is $1.5 million.
• The variable cost of producing each CD is $2.
• Each CD will be sold for $11.99.
• The record label expects to sell 1 million CDs.
• The fixed cost of producing an LP is $0.5 million.
• The variable cost of producing each LP is $4.
• Each LP is sold for $21.99.
• LP sales are expected to be of the CD sales.

Using the information above, answer the following questions:

1. Determine how the record labels profit will vary as CD sales vary from 100,000 to 1 million copies (with 100,000 increments.
2. Determine how the record labels profit will change as CD sales vary from 100,000 to 1 million copies and the ratio of LP to CD sales varies from .1 to .35 (with 0.05 increments).
3. Should the record label agree with the bands royalty demands?