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II. Break-Even Analysis (*total cost = total sales) The estimated budget (investment) is $200 million dollars....

II. Break-Even Analysis (*total cost = total sales) The estimated budget (investment) is $200 million dollars. Assuming that the movie ticket is $12 each, the share of the ticket sales between movie theaters and Walt Disney is 50/50. a. How many tickets it has to sell in order to make profit out of this movie? b. The box office of the first-week is $202 million dollars, at least how many tickets the company has to sell in order to cover all investment?

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Answer #1

For every ticket sold Walt Disney will get $6.

Total investment = $200 million

Number of ticket needed to be sold in order to be at breakeven (For Walt Disney)

= 200,000,000/6

= 33333333 Tickets

Number of ticket needed to be sold in order to be at breakeven (For movie) = 200,000,000/12

                                                                                                                         = 16666666.67 Tickets

If total revenue will be 400,000,000 then total cost will be recovered.

First week revenue = 202 million

Remaining revenue needed to make = 400 – 202 = 198 million

Number of ticket need to be sold = 198000000/12 = 16500000 Tickets

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