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22 Nov 2024, 12:20
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Message from the Managing Director of a theater company to the Artistic Director
I have information about six theaters that could be suitable for our upcoming production. Their capacities range from 142 seats to 199 seats, and their rental rates range from $6000 per week to $12,000 per week. Location accounts for much of the difference in prices: Theaters in Center City are pricier than the others. On the other hand, we are likely to sell more tickets in a centrally located theater than in one of the others. Judging by our recent productions, I think that we should be able to achieve 50% of our weekly box office potential (that is, 50% of what we would earn in a week if we sold all tickets to all performances at the maximum price) in Center City. Otherwise, 40% is a more reasonable expectation.
Take a look at the attached table for more details.
I have information about six theaters that could be suitable for our upcoming production. Their capacities range from 142 seats to 199 seats, and their rental rates range from $6000 per week to $12,000 per week. Location accounts for much of the difference in prices: Theaters in Center City are pricier than the others. On the other hand, we are likely to sell more tickets in a centrally located theater than in one of the others. Judging by our recent productions, I think that we should be able to achieve 50% of our weekly box office potential (that is, 50% of what we would earn in a week if we sold all tickets to all performances at the maximum price) in Center City. Otherwise, 40% is a more reasonable expectation.
Take a look at the attached table for more details.
The Lark: No
The Tulip: No
The Attic: Yes
Be sure to select an answer first to save it in the Error Log before revealing the correct answer (OA)!
Difficulty:
35%
(medium)
Question Stats:
57% (02:32) correct
43%
(02:50)
wrong
based on 1306
sessions
History
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For each of the following theaters, select Yes if the managing director believes it is reasonable that each week the theater company will be able to earn more than $13,000 above the weekly rental price at that theater. Otherwise, select No.
| Yes | No | |
| The Lark | ||
| The Tulip | ||
| The Attic |
ShowHide Answer
Official Answer
The Lark: No
The Tulip: No
The Attic: Yes
Attachment:
Theaters.jpg [ 75.6 KiB | Viewed 6454 times ]
23 Nov 2024, 11:00
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1. The questions asks us to find whether the theater company can reasonably earn more than $13,000 above the weekly rental price at a certain theater.
2. It needs to be noted that: "I think that we should be able to achieve 50% of our weekly box office potential (that is, 50% of what we would earn in a week if we sold all tickets to all performances at the maximum price) in Center City. Otherwise, 40% is a more reasonable expectation."
3. Now let's look at the three possible theaters:
- The Lark. The theater isn't located in the center, so we have to look at 40% of the box office potential. This is $18,900 and the difference between the weekly rental price is $18,900 - $6,500 = $12,400 < $13,000. So, the theater won't reasonably earn more.
- The Tulip. The theater is located in the center, so we have to look at 50% of the box office potential. This is $23,625 and the difference between the weekly rental price is $23,625 - $11,000 = $12,625 < $13,000. So, the theater won't reasonably earn more.
- The Attic. The theater is located in the center, so we have to look at 50% of the box office potential. This is $23,625 and the difference between the weekly rental price is $23,625 - $10,000 = $13,625 > $13,000. So, the theater will reasonably earn more.
2. It needs to be noted that: "I think that we should be able to achieve 50% of our weekly box office potential (that is, 50% of what we would earn in a week if we sold all tickets to all performances at the maximum price) in Center City. Otherwise, 40% is a more reasonable expectation."
3. Now let's look at the three possible theaters:
- The Lark. The theater isn't located in the center, so we have to look at 40% of the box office potential. This is $18,900 and the difference between the weekly rental price is $18,900 - $6,500 = $12,400 < $13,000. So, the theater won't reasonably earn more.
- The Tulip. The theater is located in the center, so we have to look at 50% of the box office potential. This is $23,625 and the difference between the weekly rental price is $23,625 - $11,000 = $12,625 < $13,000. So, the theater won't reasonably earn more.
- The Attic. The theater is located in the center, so we have to look at 50% of the box office potential. This is $23,625 and the difference between the weekly rental price is $23,625 - $10,000 = $13,625 > $13,000. So, the theater will reasonably earn more.
14 Jun 2026, 09:24
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THE IMPORTANT THING TO NOTE IS HIGHLIGHTED IN BOLD
Each week the theater company will be able to earn more than $13,000 above the weekly rental price at that theater, so we need to subtract (BOX OFFICE POTENTIAL - WEEKLY RENTAL)
1. LARK - Not in center city, hence, 40% to be considered
$18,900 - $6,500 = $12,400 < $13,000, hence NO
2. TULIP - In city center, hence, 50% to be considered
$23,625 - $11,000 = $12,625 < $13,000, hence NO
3. ATTIC - In city center, hence, 50% to be considered
$23,625 - $10,000 = $13,625 > $13,000, hence YES
Hope it helps....
Each week the theater company will be able to earn more than $13,000 above the weekly rental price at that theater, so we need to subtract (BOX OFFICE POTENTIAL - WEEKLY RENTAL)
1. LARK - Not in center city, hence, 40% to be considered
$18,900 - $6,500 = $12,400 < $13,000, hence NO
2. TULIP - In city center, hence, 50% to be considered
$23,625 - $11,000 = $12,625 < $13,000, hence NO
3. ATTIC - In city center, hence, 50% to be considered
$23,625 - $10,000 = $13,625 > $13,000, hence YES
Hope it helps....
