P5-14: Creative Learning Centers Creative Learning Centers (CLC), a for-profit firm, operates over 100 preschools primarily located in the northeast for children ages 4-6. CLC's innovative curriculum utilizes the latest technology and offers young minds creative expression, language and social skills, physical movement, music, and number skills-all provided by professional trained teachers. CLC leases buildings for their schools and invests substantial resources in leasehold improvements for classrooms, technology, and playground equipment. CLC's cost of capital is 12 percent. Typical tuition is about $6,300 per year for a five-day-a- Page 200 week, four-hour-per-day program. Maria Schnelling manages 15 CLC schools in the state of Virginia. She has decision-making responsibility for staffing and operating her schools, as well as the responsibility for recommending adding new schools and closing existing schools. The following table C provides current operating data on all of her 15 preschools, and breaks out her top- and bottom-performing schools Total Investment $11,625,000 After-Tax Operating Income All 15 Virginia preschools $1,811,250 Best 3 Virginia performers VA4 VA12 VA9 Worst 3 Virginia performers VA2 VA8 VA5 $184,230 S156,030 $151,000 $801,000 $743,000 $755,000 $34,000 $14,200 -$23,700 $680,000 $710,000 $790,000