Columbia Memorial Hospital - Finance - Breakeven Analysis Case

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CASE6

CASE 6 Student Version Copyright 2010
8/24/09 by FACHE
COLUMBIA MEMORIAL HOSPITAL
Breakeven Analysis
This case illustrates the use of breakeven analysis to help make operating decisions. Note that the model
extends out to Column AR.
The model consists of a complete base case analysis--no changes need to be made to the existing
MODEL-GENERATED DATA section. However, all relevant values in the INPUT DATA section of the student
version have been replaced with zeros. Thus, students must determine the appropriate input values and
enter them into the model. These cells are colored red. When this is done, any error cells will be corrected
and the base case solution will appear. Note that the model does not contain any risk analyses, so students
will have to create their own if required by the case. Furthermore, students must create their own graphics
(charts) if needed to supplement those included with this model.
The instructor version of the model contains three graph sheets. Figure 1 plots total monthly revenue, total
monthly costs, and total monthly profit versus number of incremental visits without the new marketing program.
Figure 2 plots the same information with the new marketing program, and Figure 3 contains the incremental
marketing program plot.
INPUT DATA:
Historical Financial Data:
Monthly Averages
CY 2009 Jan 2010 Feb 2010 2009 Jan/Feb10 Combined
Number of visits 14,522 1,365 1,335 1,210 1,350 1,230
Net revenue $548,747 $55,028 $54,748 $45,729 $54,888 $47,037
Salaries and wages $154,250 $13,540 $13,544 $12,854 $13,542 $12,952
Physicians fees 192,000 18,000 18,000 16,000 18,000 16,286
Malpractice insurance 31,440 3,215 3,215 2,620 3,215 2,705
Travel and education 5,365 538 665 447 602 469
General insurance 8,112 843 843 676 843 700
Subscriptions 189 0 0 16 0 14
Electricity 11,820 1,124 1,029 985 1,077 998
Water 1,260 135 142 105 139 110
Equipment rental 1,260 105 105 105 105 105
Building lease 155,745 12,500 12,500 12,979 12,500 12,910
Other operating expenses 103,779 8,152 7,923 8,648 8,038 8,561
Total operating expenses $665,220 $58,152 $57,966 $55,435 $58,059 $55,810
Net profit (loss) ($116,473) ($3,124) ($3,218) ($9,706) ($3,171) ($8,773)
Gross margin (%) -21.2% -5.7% -5.9% -21.2% -5.8% -18.7%
Pro Forma Average Month:
Number of visits 1,350
Net revenue $54,888
Salaries and wages $13,542
Physicians fees 18,000
Malpractice insurance 3,215
Travel and education 602
General insurance 843
Subscriptions 0
Electricity 1,077
Water 139
Equipment rental 105
Building lease 12,500
Other operating expenses 8,038
Total operating expenses 58,059
Net profit (loss) (3,171)
Gross margin (%) -5.8%
Incremental Monthly Costs:
Number of Additional Visits per Day
0 1-10 11-20 21-30 31-40
Variable costs:
Medical supplies $3.00 per visit
Administrative supplies 0.50 per visit
Total variable costs per visit $3.50 per visit
Semifixed costs:
Salaries and wages $4,000 $5,000 $6,000 $7,000
Physician fees 10,000 10,000 10,000 10,000
Total monthly semifixed costs $0 $14,000 $15,000 $16,000 $17,000
Fixed costs:
Marketing assistant's salary $3,000 $3,000 $3,000 $3,000 $3,000
Advertising expenses 4,000 4,000 4,000 4,000 4,000
Total monthly fixed costs $7,000 $7,000 $7,000 $7,000 $7,000
MODEL-GENERATED DATA:
Breakeven Analysis:
Without New Marketing Program:
Maximum additional monthly visits 0 150 300 450 600 750 900 1050 1200
Maximum additional daily visits 0 5 10 15 20 25 30 35 40
Incremental variable costs $0 $525 $1,050 $1,575 $2,100 $2,625 $3,150 $3,675 $4,200
Incremental semifixed costs $0 $14,000 $14,000 $15,000 $15,000 $16,000 $16,000 $17,000 $17,000
Total incremental monthly costs $0 $14,525 $15,050 $16,575 $17,100 $18,625 $19,150 $20,675 $21,200
Incremental cost/visit NA $96.83 $50.17 $36.83 $28.50 $24.83 $21.28 $19.69 $17.67
Summary Financial Statements:
Number of Additional Visits per Day
0 5 10 15 20 25 30 35 40
Total monthly visits 1,350 1,500 1,650 1,800 1,950 2,100 2,250 2,400 2,550
Total daily visits 45 50 55 60 65 70 75 80 85
Net revenue per visit $40.66 $40.66 $40.66 $40.66 $40.66 $40.66 $40.66 $40.66 $40.66
Total net monthly revenue $54,888 $60,987 $67,085 $73,184 $79,283 $85,381 $91,480 $97,579 $103,677
Total current costs $58,059 $58,059 $58,059 $58,059 $58,059 $58,059 $58,059 $58,059 $58,059
Total incremental costs 0 14,525 15,050 16,575 17,100 18,625 19,150 20,675 21,200
Current + incremental costs $58,059 $72,584 $73,109 $74,634 $75,159 $76,684 $77,209 $78,734 $79,259
Monthly profit (loss) ($3,171) ($11,597) ($6,024) ($1,450) $4,124 $8,697 $14,271 $18,845 $24,418
Gross margin (%) -5.8% -19.0% -9.0% -2.0% 5.2% 10.2% 15.6% 19.3% 23.6%
Graphics Input:
Number of Incremental Visits per Day
0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40
Total daily visits 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85
Total monthly visits 1,350 1,380 1,410 1,440 1,470 1,500 1,530 1,560 1,590 1,620 1,650 1,680 1,710 1,740 1,770 1,800 1,830 1,860 1,890 1,920 1,950 1,980 2,010 2,040 2,070 2,100 2,130 2,160 2,190 2,220 2,250 2,280 2,310 2,340 2,370 2,400 2,430 2,460 2,490 2,520 2,550
Total monthly revenue $54,888 $56,108 $57,327 $58,547 $59,767 $60,987 $62,206 $63,426 $64,646 $65,866 $67,085 $68,305 $69,525 $70,745 $71,964 $73,184 $74,404 $75,623 $76,843 $78,063 $79,283 $80,502 $81,722 $82,942 $84,162 $85,381 $86,601 $87,821 $89,041 $90,260 $91,480 $92,700 $93,919 $95,139 $96,359 $97,579 $98,798 $100,018 $101,238 $102,458 $103,677
Total current costs $58,059 $58,059 $58,059 $58,059 $58,059 $58,059 $58,059 $58,059 $58,059 $58,059 $58,059 $58,059 $58,059 $58,059 $58,059 $58,059 $58,059 $58,059 $58,059 $58,059 $58,059 $58,059 $58,059 $58,059 $58,059 $58,059 $58,059 $58,059 $58,059 $58,059 $58,059 $58,059 $58,059 $58,059 $58,059 $58,059 $58,059 $58,059 $58,059 $58,059 $58,059
Incremental variable costs $0 $105 $210 $315 $420 $525 $630 $735 $840 $945 $1,050 $1,155 $1,260 $1,365 $1,470 $1,575 $1,680 $1,785 $1,890 $1,995 $2,100 $2,205 $2,310 $2,415 $2,520 $2,625 $2,730 $2,835 $2,940 $3,045 $3,150 $3,255 $3,360 $3,465 $3,570 $3,675 $3,780 $3,885 $3,990 $4,095 $4,200
Incremental semifixed costs 0 14,000 14,000 14,000 14,000 14,000 14,000 14,000 14,000 14,000 14,000 15,000 15,000 15,000 15,000 15,000 15,000 15,000 15,000 15,000 15,000 16,000 16,000 16,000 16,000 16,000 16,000 16,000 16,000 16,000 16,000 17,000 17,000 17,000 17,000 17,000 17,000 17,000 17,000 17,000 17,000
Incremental fixed costs 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
Total incremental costs $0 $14,105 $14,210 $14,315 $14,420 $14,525 $14,630 $14,735 $14,840 $14,945 $15,050 $16,155 $16,260 $16,365 $16,470 $16,575 $16,680 $16,785 $16,890 $16,995 $17,100 $18,205 $18,310 $18,415 $18,520 $18,625 $18,730 $18,835 $18,940 $19,045 $19,150 $20,255 $20,360 $20,465 $20,570 $20,675 $20,780 $20,885 $20,990 $21,095 $21,200
Graphical recap:
Incremental visits 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40
Total monthly revenue $54,888 $56,108 $57,327 $58,547 $59,767 $60,987 $62,206 $63,426 $64,646 $65,866 $67,085 $68,305 $69,525 $70,745 $71,964 $73,184 $74,404 $75,623 $76,843 $78,063 $79,283 $80,502 $81,722 $82,942 $84,162 $85,381 $86,601 $87,821 $89,041 $90,260 $91,480 $92,700 $93,919 $95,139 $96,359 $97,579 $98,798 $100,018 $101,238 $102,458 $103,677
Total monthly costs $58,059 $72,164 $72,269 $72,374 $72,479 $72,584 $72,689 $72,794 $72,899 $73,004 $73,109 $74,214 $74,319 $74,424 $74,529 $74,634 $74,739 $74,844 $74,949 $75,054 $75,159 $76,264 $76,369 $76,474 $76,579 $76,684 $76,789 $76,894 $76,999 $77,104 $77,209 $78,314 $78,419 $78,524 $78,629 $78,734 $78,839 $78,944 $79,049 $79,154 $79,259
Monthly profit (loss) ($3,171) ($16,056) ($14,942) ($13,827) ($12,712) ($11,597) ($10,483) ($9,368) ($8,253) ($7,138) ($6,024) ($5,909) ($4,794) ($3,679) ($2,565) ($1,450) ($335) $779 $1,894 $3,009 $4,124 $4,238 $5,353 $6,468 $7,583 $8,697 $9,812 $10,927 $12,042 $13,156 $14,271 $14,386 $15,500 $16,615 $17,730 $18,845 $19,959 $21,074 $22,189 $23,304 $24,418
With New Marketing Program:
Maximum additional monthly visits 0 150 300 450 600 750 900 1050 1200
Maximum additional daily visits 0 5 10 15 20 25 30 35 40
Incremental variable costs $0 $525 $1,050 $1,575 $2,100 $2,625 $3,150 $3,675 $4,200
Incremental semifixed costs $0 $14,000 $14,000 $15,000 $15,000 $16,000 $16,000 $17,000 $17,000
Incremental fixed costs $7,000 $7,000 $7,000 $7,000 $7,000 $7,000 $7,000 $7,000 $7,000
Total incremental monthly costs $7,000 $21,525 $22,050 $23,575 $24,100 $25,625 $26,150 $27,675 $28,200
Incremental cost/visit NA $144 $74 $52 $40 $34 $29 $26 $24
Summary Financial Statements:
Number of Additional Visits per Day
0 5 10 15 20 25 30 35 40
Total monthly visits 1,350 1,500 1,650 1,800 1,950 2,100 2,250 2,400 2,550
Total daily visits 45 50 55 60 65 70 75 80 85
Net revenue per visit $40.66 $40.66 $40.66 $40.66 $40.66 $40.66 $40.66 $40.66 $40.66
Total net monthly revenue $54,888 $60,987 $67,085 $73,184 $79,283 $85,381 $91,480 $97,579 $103,677
Total current costs $58,059 $58,059 $58,059 $58,059 $58,059 $58,059 $58,059 $58,059 $58,059
Total incremental costs 7,000 21,525 22,050 23,575 24,100 25,625 26,150 27,675 28,200
Current + incremental costs $65,059 $79,584 $80,109 $81,634 $82,159 $83,684 $84,209 $85,734 $86,259
Monthly profit (loss) ($10,171) ($18,597) ($13,024) ($8,450) ($2,876) $1,697 $7,271 $11,845 $17,418
Gross margin (%) -18.5% -30.5% -19.4% -11.5% -3.6% 2.0% 7.9% 12.1% 16.8%
Graphics Input:
Number of Incremental Visits per Day
0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40
Total daily visits 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85
Total monthly visits 1,350 1,380 1,410 1,440 1,470 1,500 1,530 1,560 1,590 1,620 1,650 1,680 1,710 1,740 1,770 1,800 1,830 1,860 1,890 1,920 1,950 1,980 2,010 2,040 2,070 2,100 2,130 2,160 2,190 2,220 2,250 2,280 2,310 2,340 2,370 2,400 2,430 2,460 2,490 2,520 2,550
Total monthly revenue $54,888 $56,108 $57,327 $58,547 $59,767 $60,987 $62,206 $63,426 $64,646 $65,866 $67,085 $68,305 $69,525 $70,745 $71,964 $73,184 $74,404 $75,623 $76,843 $78,063 $79,283 $80,502 $81,722 $82,942 $84,162 $85,381 $86,601 $87,821 $89,041 $90,260 $91,480 $92,700 $93,919 $95,139 $96,359 $97,579 $98,798 $100,018 $101,238 $102,458 $103,677
Total current costs $58,059 $58,059 $58,059 $58,059 $58,059 $58,059 $58,059 $58,059 $58,059 $58,059 $58,059 $58,059 $58,059 $58,059 $58,059 $58,059 $58,059 $58,059 $58,059 $58,059 $58,059 $58,059 $58,059 $58,059 $58,059 $58,059 $58,059 $58,059 $58,059 $58,059 $58,059 $58,059 $58,059 $58,059 $58,059 $58,059 $58,059 $58,059 $58,059 $58,059 $58,059
Incremental variable costs $0 $105 $210 $315 $420 $525 $630 $735 $840 $945 $1,050 $1,155 $1,260 $1,365 $1,470 $1,575 $1,680 $1,785 $1,890 $1,995 $2,100 $2,205 $2,310 $2,415 $2,520 $2,625 $2,730 $2,835 $2,940 $3,045 $3,150 $3,255 $3,360 $3,465 $3,570 $3,675 $3,780 $3,885 $3,990 $4,095 $4,200
0 14,000 14,000 14,000 14,000 14,000 14,000 14,000 14,000 14,000 14,000 15,000 15,000 15,000 15,000 15,000 15,000 15,000 15,000 15,000 15,000 16,000 16,000 16,000 16,000 16,000 16,000 16,000 16,000 16,000 16,000 17,000 17,000 17,000 17,000 17,000 17,000 17,000 17,000 17,000 17,000
Incremental fixed costs 7,000 7,000 7,000 7,000 7,000 7,000 7,000 7,000 7,000 7,000 7,000 7,000 7,000 7,000 7,000 7,000 7,000 7,000 7,000 7,000 7,000 7,000 7,000 7,000 7,000 7,000 7,000 7,000 7,000 7,000 7,000 7,000 7,000 7,000 7,000 7,000 7,000 7,000 7,000 7,000 7,000
Total incremental costs $7,000 $21,105 $21,210 $21,315 $21,420 $21,525 $21,630 $21,735 $21,840 $21,945 $22,050 $23,155 $23,260 $23,365 $23,470 $23,575 $23,680 $23,785 $23,890 $23,995 $24,100 $25,205 $25,310 $25,415 $25,520 $25,625 $25,730 $25,835 $25,940 $26,045 $26,150 $27,255 $27,360 $27,465 $27,570 $27,675 $27,780 $27,885 $27,990 $28,095 $28,200
Graphical recap:
Incremental visits 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40
Total monthly revenue $54,888 $56,108 $57,327 $58,547 $59,767 $60,987 $62,206 $63,426 $64,646 $65,866 $67,085 $68,305 $69,525 $70,745 $71,964 $73,184 $74,404 $75,623 $76,843 $78,063 $79,283 $80,502 $81,722 $82,942 $84,162 $85,381 $86,601 $87,821 $89,041 $90,260 $91,480 $92,700 $93,919 $95,139 $96,359 $97,579 $98,798 $100,018 $101,238 $102,458 $103,677
Total monthly costs $65,059 $79,164 $79,269 $79,374 $79,479 $79,584 $79,689 $79,794 $79,899 $80,004 $80,109 $81,214 $81,319 $81,424 $81,529 $81,634 $81,739 $81,844 $81,949 $82,054 $82,159 $83,264 $83,369 $83,474 $83,579 $83,684 $83,789 $83,894 $83,999 $84,104 $84,209 $85,314 $85,419 $85,524 $85,629 $85,734 $85,839 $85,944 $86,049 $86,154 $86,259
Monthly profit (loss) ($10,171) ($23,056) ($21,942) ($20,827) ($19,712) ($18,597) ($17,483) ($16,368) ($15,253) ($14,138) ($13,024) ($12,909) ($11,794) ($10,679) ($9,565) ($8,450) ($7,335) ($6,221) ($5,106) ($3,991) ($2,876) ($2,762) ($1,647) ($532) $583 $1,697 $2,812 $3,927 $5,042 $6,156 $7,271 $7,386 $8,500 $9,615 $10,730 $11,845 $12,959 $14,074 $15,189 $16,304 $17,418
Expanded Marketing Program Incremental Analysis:
Added daily visits 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40
Incremental monthly rev $0 $1,220 $2,439 $3,659 $4,879 $6,099 $7,318 $8,538 $9,758 $10,978 $12,197 $13,417 $14,637 $15,857 $17,076 $18,296 $19,516 $20,735 $21,955 $23,175 $24,395 $25,614 $26,834 $28,054 $29,274 $30,493 $31,713 $32,933 $34,153 $35,372 $36,592 $37,812 $39,031 $40,251 $41,471 $42,691 $43,910 $45,130 $46,350 $47,570 $48,789
Incremental monthly costs 7,000 21,105 21,210 21,315 21,420 21,525 21,630 21,735 21,840 21,945 22,050 23,155 23,260 23,365 23,470 23,575 23,680 23,785 23,890 23,995 24,100 25,205 25,310 25,415 25,520 25,625 25,730 25,835 25,940 26,045 26,150 27,255 27,360 27,465 27,570 27,675 27,780 27,885 27,990 28,095 28,200
Incr monthly profit (loss) ($7,000) ($19,885) ($18,771) ($17,656) ($16,541) ($15,426) ($14,312) ($13,197) ($12,082) ($10,967) ($9,853) ($9,738) ($8,623) ($7,508) ($6,394) ($5,279) ($4,164) ($3,050) ($1,935) ($820) $295 $409 $1,524 $2,639 $3,754 $4,868 $5,983 $7,098 $8,213 $9,327 $10,442 $10,557 $11,671 $12,786 $13,901 $15,016 $16,130 $17,245 $18,360 $19,475 $20,589
END
&A
Page &P
To complete this input, choose the historical values from above that represent the best estimates for the average month for the entire coming year.

Figure 1

0 0 0 0
1 1 1 1
2 2 2 2
3 3 3 3
4 4 4 4
5 5 5 5
6 6 6 6
7 7 7 7
8 8 8 8
9 9 9 9
10 10 10 10
11 11 11 11
12 12 12 12
13 13 13 13
14 14 14 14
15 15 15 15
16 16 16 16
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18 18 18 18
19 19 19 19
20 20 20 20
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22 22 22 22
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27 27 27 27
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31 31 31 31
32 32 32 32
33 33 33 33
34 34 34 34
35 35 35 35
36 36 36 36
37 37 37 37
38 38 38 38
39 39 39 39
40 40 40 40
Total Monthly Revenue
Total Monthly Costs
Total Monthly Profit
Figure 1 Breakeven without New Marketing Program
54888
58059
-3171
56107.7333333333
72164
-16056.2666666667
57327.4666666667
72269
-14941.5333333333
58547.2
72374
-13826.8
59766.9333333333
72479
-12712.0666666667
60986.6666666667
72584
-11597.3333333333
62206.4
72689
-10482.6
63426.1333333333
72794
-9367.8666666667
64645.8666666667
72899
-8253.1333333333
65865.6
73004
-7138.4
67085.3333333333
73109
-6023.6666666667
68305.0666666667
74214
-5908.9333333333
69524.8
74319
-4794.2
70744.5333333333
74424
-3679.4666666667
71964.2666666667
74529
-2564.7333333333
73184
74634
-1450
74403.7333333333
74739
-335.2666666667
75623.4666666667
74844
779.4666666667
76843.2
74949
1894.2
78062.9333333333
75054
3008.9333333333
79282.6666666667
75159
4123.6666666667
80502.4
76264
4238.4
81722.1333333333
76369
5353.1333333333
82941.8666666667
76474
6467.8666666667
84161.6
76579
7582.6
85381.3333333333
76684
8697.3333333333
86601.0666666667
76789
9812.0666666667
87820.8
76894
10926.8
89040.5333333333
76999
12041.5333333333
90260.2666666667
77104
13156.2666666667
91480
77209
14271
92699.7333333333
78314
14385.7333333333
93919.4666666667
78419
15500.4666666667
95139.2
78524
16615.2
96358.9333333333
78629
17729.9333333333
97578.6666666667
78734
18844.6666666667
98798.4
78839
19959.4
100018.133333333
78944
21074.1333333333
101237.866666667
79049
22188.8666666667
102457.6
79154
23303.6
103677.333333333
79259
24418.3333333333

Figure 2

0 0 0 0
1 1 1 1
2 2 2 2
3 3 3 3
4 4 4 4
5 5 5 5
6 6 6 6
7 7 7 7
8 8 8 8
9 9 9 9
10 10 10 10
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35 35 35 35
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37 37 37 37
38 38 38 38
39 39 39 39
40 40 40 40
Total Monthly Revenue
Total Monthly Costs
Total Monthly Profit
Figure 2 Breakeven with New Marketing Program
54888
65059
-10171
56107.7333333333
79164
-23056.2666666667
57327.4666666667
79269
-21941.5333333333
58547.2
79374
-20826.8
59766.9333333333
79479
-19712.0666666667
60986.6666666667
79584
-18597.3333333333
62206.4
79689
-17482.6
63426.1333333333
79794
-16367.8666666667
64645.8666666667
79899
-15253.1333333333
65865.6
80004
-14138.4
67085.3333333333
80109
-13023.6666666667
68305.0666666667
81214
-12908.9333333333
69524.8
81319
-11794.2
70744.5333333333
81424
-10679.4666666667
71964.2666666667
81529
-9564.7333333333
73184
81634
-8450
74403.7333333333
81739
-7335.2666666667
75623.4666666667
81844
-6220.5333333333
76843.2
81949
-5105.8
78062.9333333333
82054
-3991.0666666667
79282.6666666667
82159
-2876.3333333333
80502.4
83264
-2761.6
81722.1333333333
83369
-1646.8666666666
82941.8666666667
83474
-532.1333333333
84161.6
83579
582.6
85381.3333333333
83684
1697.3333333333
86601.0666666667
83789
2812.0666666667
87820.8
83894
3926.8
89040.5333333333
83999
5041.5333333333
90260.2666666667
84104
6156.2666666667
91480
84209
7271
92699.7333333333
85314
7385.7333333333
93919.4666666667
85419
8500.4666666667
95139.2
85524
9615.2
96358.9333333333
85629
10729.9333333333
97578.6666666667
85734
11844.6666666667
98798.4
85839
12959.4
100018.133333333
85944
14074.1333333333
101237.866666667
86049
15188.8666666667
102457.6
86154
16303.6
103677.333333333
86259
17418.3333333333

Figure 3

0 0 0 0
1 1 1 1
2 2 2 2
3 3 3 3
4 4 4 4
5 5 5 5
6 6 6 6
7 7 7 7
8 8 8 8
9 9 9 9
10 10 10 10
11 11 11 11
12 12 12 12
13 13 13 13
14 14 14 14
15 15 15 15
16 16 16 16
17 17 17 17
18 18 18 18
19 19 19 19
20 20 20 20
21 21 21 21
22 22 22 22
23 23 23 23
24 24 24 24
25 25 25 25
26 26 26 26
27 27 27 27
28 28 28 28
29 29 29 29
30 30 30 30
31 31 31 31
32 32 32 32
33 33 33 33
34 34 34 34
35 35 35 35
36 36 36 36
37 37 37 37
38 38 38 38
39 39 39 39
40 40 40 40
Total Monthly Revenue
Total Monthly Costs
Total Monthly Profit
Figure 3 Incremental Breakeven of Marketing Program
0
7000
-7000
1219.7333333333
21105
-19885.2666666667
2439.4666666667
21210
-18770.5333333333
3659.2
21315
-17655.8
4878.9333333333
21420
-16541.0666666667
6098.6666666667
21525
-15426.3333333333
7318.4
21630
-14311.6
8538.1333333333
21735
-13196.8666666667
9757.8666666667
21840
-12082.1333333333
10977.6
21945
-10967.4
12197.3333333333
22050
-9852.6666666667
13417.0666666667
23155
-9737.9333333333
14636.8
23260
-8623.2
15856.5333333333
23365
-7508.4666666667
17076.2666666667
23470
-6393.7333333333
18296
23575
-5279
19515.7333333333
23680
-4164.2666666667
20735.4666666667
23785
-3049.5333333333
21955.2
23890
-1934.8
23174.9333333333
23995
-820.0666666667
24394.6666666667
24100
294.6666666667
25614.4
25205
409.4
26834.1333333333
25310
1524.1333333333
28053.8666666667
25415
2638.8666666667
29273.6
25520
3753.6
30493.3333333333
25625
4868.3333333333
31713.0666666667
25730
5983.0666666667
32932.8
25835
7097.8
34152.5333333333
25940
8212.5333333333
35372.2666666667
26045
9327.2666666667
36592
26150
10442
37811.7333333333
27255
10556.7333333333
39031.4666666667
27360
11671.4666666667
40251.2
27465
12786.2
41470.9333333333
27570
13900.9333333333
42690.6666666667
27675
15015.6666666667
43910.4
27780
16130.4
45130.1333333333
27885
17245.1333333333
46349.8666666667
27990
18359.8666666667
47569.6
28095
19474.6
48789.3333333333
28200
20589.3333333333