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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:
58% (02:29) correct
42%
(02:49)
wrong
based on 919
sessions
History
Date
Time
Result
Not Attempted Yet
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 4951 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.
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