"A garage band wants to hold a concert. The expected crowd is 3,000. The average expenditure on concessions is $15. Tickets sell for $10 each, and the band’s profit is 80% of the gate, along with concession sales, minus a fixed cost of $10,000. To clarify, the band only gets 80% of the all of the revenue including both ticket sales and concession sales.
Assume for now that all of the input variable are known with certainty and that the concert venue has sufficient capacity to hold 3200 people. However, for your first Base Model, let’s IGNORE the concert venue capacity constraint. In other words, pretend that the venue can hold an unlimited number of people.
Your goal is to build a spreadsheet model that will allow you to do things like find the breakeven level of ticket sales and do some sensitivity analysis to some of the inputs."