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ADMN-2167 Financial Decision Making Bob Carpenter

ADMN-2167 Financial Decision Making Bob Carpenter. ADMN-2167 Break Even Analysis Bob Carpenter. Financials – Break Even for additional partners. profi t. revenue. $. v ariable cost. total cost. fixed cost. contribution. Students. Financials – Types of Cost.

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ADMN-2167 Financial Decision Making Bob Carpenter

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  1. ADMN-2167 Financial Decision Making Bob Carpenter

  2. ADMN-2167 Break Even Analysis Bob Carpenter

  3. Financials – Break Even for additional partners profit revenue $ variable cost total cost fixed cost contribution Students

  4. Financials – Types of Cost • Additional Fixed costs • Course facilitator for 17 courses $34,000 • Advertising / promotion $20,000 • T&L $10,000 • Other expenses $16,000 • Variable costs/student • Online instructor per student/yr. $2,550 • Mandatory set aside $1197 • Revenue/student. • Per student/yr. $9450 • BIU contributions $7,650 • Note that revenue is not shared with new partners when there are less than 15 students so that the full revenue is considered.

  5. Financial Exercise – Break Even for additional partners (1) • Additional Fixed costs • Course facilitator for 17 courses $34,000 • Advertising / promotion $20,000 • T&L $10,000 • Other expenses $16,000 • Variable costs/student • Online instructor per student/yr. $2,550 • Mandatory set aside $1197 • Revenue/student. • Per student/yr. $9450 • BIU contributions $7,650

  6. Financials – Break Even for additional partners (2) • At breakeven the sum of fixed and variable costs equal revenues • 80,000 + 3747N = 17,100N • N=80,000/(17,100-3747) • = 6 with full BIU

  7. Financials – Break Even for additional partners profit revenue $ variable cost total cost fixed cost $80000 contribution 6 Students

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