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Eastman Publishing Company is considering publishing anelectronic textbook about spreadsheet applications for business.The fixed cost of manuscript preparation, textbook design, andweb-site

Eastman Publishing Company is considering publishing anelectronic textbook about spreadsheet applications for business.The fixed cost of manuscript preparation, textbook design, andweb-site construction is estimated to be $150,000. Variableprocessing costs are estimated to be $7 per book. The publisherplans to sell single-user access to the book for $49.

(a) Build a spreadsheet model in Excelto calculate the profit/loss for a given demand. What profit can beanticipated with a demand of 3,400 copies?
  For subtractive or negative numbersuse a minus sign.
  $
   
(b) Use a data table to vary demandfrom 1,000 to 6,000 in increments of 200 to test the sensitivity ofprofit to demand. Breakeven occurs where profit goes from anegative to a positive value, that is, breakeven is where totalrevenue = total cost yielding a profit of zero. In which intervalof demand does breakeven occur?
   
  (i) Breakevenappears in the interval of 3,000 to 3,200 copies.
  (ii) Breakevenappears in the interval of 3,400 to 3,600 copies.
  (iii) Breakevenappears in the interval of 3,600 to 3,800 copies.
  (iv) Breakevenappears in the interval of 3,800 to 4,000 copies.
  - Select your answer -Option(i)Option (ii)Option (iii)Option (iv)Item 2
   
(c) Use Goal Seek to answer thefollowing question. With a demand of 3,400 copies, what is theaccess price per copy that the publisher must charge to breakeven?
  If required, round your answers totwo decimal places.

Jun 07 2021 View more View Less

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