The University of Nebraska Board of Regents recently approved the sale of alcohol at certain athletic events
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- The University of Nebraska Board of Regents recently approved the sale of alcohol at certain athletic events (source:https://nebraskanewsservice.net/news/nu-regents-amend-policies-that-could-open-door-to-more-alcohol-at-athletic-events/).The University is considering a two-year "pilot investment". The cost of this investment is an up-front investment of $20,000,000, which includes obtaining a two-year alcohol license and equipping the Pinnacle Bank Arena with equipment to distribute beer. Assume that all first-year alcohol sales will occur at the endof the first year and that all second-year sales occur at the end of the second year, and that the relevant discount rate is 5% per year.
- If the marginal cost of each sale is constant at $2.00, and the price is $10, how many annual sales must be made for the University to break-even? Assume equal sales in each year.
- If the University can sell 2,000,000 units per year, what is the break-even price?
Related Book For
Financial Accounting
ISBN: 978-0078025549
3rd edition
Authors: J. David Spiceland, Wayne Thomas, Don Herrmann
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