The TKR franchise is looking to estimate its after-tax profits for the coming season. One of their
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Question:
a. What is the estimated after-tax profit for the season? (Use the model on the course page)
b. If TKR should make it to the playoffs they would have an additional 5 home games and increased interest would increase average percentage seats sold per game to 88%. What is the financial impact of not making the playoffs?
c. The franchise owner is interested in increasing stadium capacity by spending $2,000,000 to build more box seats. This would increase the stadium capacity by 500 and would change the sale mix assumption to box seats 25% and general admission 75%. If they desire to recoup the investment in 5 years should they undertake this investment?
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