Question: how do I solve this problem using sensitvity analysis in excel; You have been asked to analyze the profitability of releasing a new music album
how do I solve this problem using sensitvity analysis in excel;
You have been asked to analyze the profitability of releasing a new music album by a hair metal band from s You have been able to collect the following information:
The band is expecting a onetime royalty payment of $ million.
The fixed cost of producing a CD version of the book is $ million.
The variable cost of producing each CD is $
Each CD will be sold for $
The record label expects to sell million CDs
The fixed cost of producing an LP is $ million.
The variable cost of producing each LP is $
Each LP is sold for $
LP sales are expected to be of the CD sales.
Using the information above, answer the following questions:
Determine how the record labels profit will vary as CD sales vary from to million copies with increments.
Determine how the record labels profit will change as CD sales vary from to million copies and the ratio of LP to CD sales varies from to with increments
Should the record label agree with the bands royalty demands?
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