You have been assigned to analyze the profitability of Sachin Tendulkar's autobiography.

Given below are the assumptions made:

a) Sachin will receive a onetime royalty payment of Rs 75 lakhs
b) The fixed cost of producing the hard cover version of the book is Rs 25 lakhs
c) The variable cost of producing each hard cover book is Rs 200
d) The publisher's net from selling each copy of a hardcover is Rs 1000
e) The publisher expects to sell 10 lakh hard cover versions of the book
f) The fixed cost of producing the paperback version of the book is Rs 2 lakhs
g) The variable cost of producing each paperback version is Rs 50
h) The publisher's net from selling each copy of a paperback is Rs 500
i) Paperback sales will be double the hard cover sales
Determine how the profits of the publisher will vary as the hard cover sales vary from 1 lakh to 50 lakhs
Also determine how the profits of the publisher will vary as the hard cover sales vary from 1 lakh to 50 lakhs and the ratio of paper bac
Draw a chart to graphically depict how the publisher's profits vary with the hard cover sales and the ratio of paper back to hard cover s

Onetime royalty payment 7,500,000

Hardcover Fixed Cost 2,500,000
Hardcover variable cost 200
Publisher's price Hardcover 1,000 1,689,800,000
Hardcover no. of sales 1,000,000 100,000 159,800,000
Hardcover/Paperback ratio 2 200,000 329,800,000
Paperback fixed cost 200,000 300,000 499,800,000
Paperback variable cost 50 400,000 669,800,000
Publisher's price Paperback 500 500,000 839,800,000
Paperback no. of sales 2,000,000 600,000 1,009,800,000
700,000 1,179,800,000
800,000 1,349,800,000
Hardcover Sales 1,000,000,000 900,000 1,519,800,000
Paperback sales 1,000,000,000 1,000,000 1,689,800,000
Hardcover Cost 202,500,000 1,100,000 1,859,800,000
Paperback Cost 100,200,000 1,200,000 2,029,800,000
Royalty Cost 7,500,000 1,300,000 2,199,800,000
1,400,000 2,369,800,000
Profit 1,689,800,000 1,500,000 2,539,800,000
1,600,000 2,709,800,000
1,700,000 2,879,800,000
1,800,000 3,049,800,000
1,900,000 3,219,800,000
2,000,000 3,389,800,000
2,100,000 3,559,800,000
2,200,000 3,729,800,000
2,300,000 3,899,800,000
2,400,000 4,069,800,000
2,500,000 4,239,800,000
2,600,000 4,409,800,000
2,700,000 4,579,800,000
2,800,000 4,749,800,000
2,900,000 4,919,800,000
3,000,000 5,089,800,000
3,100,000 5,259,800,000
3,200,000 5,429,800,000
3,300,000 5,599,800,000
3,400,000 5,769,800,000
3,500,000 5,939,800,000
3,600,000 6,109,800,000
3,700,000 6,279,800,000
3,800,000 6,449,800,000
3,900,000 6,619,800,000
4,000,000 6,789,800,000
4,100,000 6,959,800,000
4,200,000 7,129,800,000
4,300,000 7,299,800,000
4,400,000 7,469,800,000
4,500,000 7,639,800,000
4,600,000 7,809,800,000
4,700,000 7,979,800,000
4,800,000 8,149,800,000
4,900,000 8,319,800,000
5,000,000 8,489,800,000
he assumptions made:

s and the ratio of paper back sales to hard cover sales vary from 1 to 2.5
f paper back to hard cover sales

1,689,800,000 1 1.25 1.5 1.75

100,000 114,800,000 126,050,000 137,300,000 148,550,000
500,000 614,800,000 671,050,000 727,300,000 783,550,000
1,000,000 1,239,800,000 1,352,300,000 1,464,800,000 1,577,300,000
1,500,000 1,864,800,000 2,033,550,000 2,202,300,000 2,371,050,000
2,000,000 2,489,800,000 2,714,800,000 2,939,800,000 3,164,800,000
2,500,000 3,114,800,000 3,396,050,000 3,677,300,000 3,958,550,000
3,000,000 3,739,800,000 4,077,300,000 4,414,800,000 4,752,300,000
3,500,000 4,364,800,000 4,758,550,000 5,152,300,000 5,546,050,000
4,000,000 4,989,800,000 5,439,800,000 5,889,800,000 6,339,800,000
4,500,000 5,614,800,000 6,121,050,000 6,627,300,000 7,133,550,000
5,000,000 6,239,800,000 6,802,300,000 7,364,800,000 7,927,300,000
 2 2.25 2.5
159,800,000 171,050,000 182,300,000
839,800,000 896,050,000 952,300,000
1,689,800,000 1,802,300,000 1,914,800,000
2,539,800,000 2,708,550,000 2,877,300,000
3,389,800,000 3,614,800,000 3,839,800,000
4,239,800,000 4,521,050,000 4,802,300,000
5,089,800,000 5,427,300,000 5,764,800,000
5,939,800,000 6,333,550,000 6,727,300,000
6,789,800,000 7,239,800,000 7,689,800,000
7,639,800,000 8,146,050,000 8,652,300,000
8,489,800,000 9,052,300,000 9,614,800,000
11. The Budhha Airline flight from Kathmandu to Pokhara has a capacity of 250 people. The airline sold 270 ticket
refundable. The variable cost of flying a passenger (mostly food costs and fuel costs) is Rs. 300 per passenger. If m
and Budhha Airline must pay overbooking compensation of Rs. 3500 per person to each overbooked passenger. D
the number of customers who show up for the flight.

Airplane Capacity
Tickets Sold
Ticket Price
Variable Cost
Overbooking Compensation
Total Revenue from tickets
Total Variable Cost
% of people showing up Number of Passengers Showing up
0.0% 0
2.5% 6
5.0% 13
7.5% 20
10.0% 27
12.5% 33
15.0% 40
17.5% 47
20.0% 54
22.5% 60
25.0% 67
27.5% 74
30.0% 81
32.5% 87
35.0% 94
37.5% 101
40.0% 108
42.5% 114
45.0% 121
47.5% 128
50.0% 135
52.5% 141
55.0% 148
57.5% 155
60.0% 162
62.5% 168
65.0% 175
67.5% 182
 70.0% 189
72.5% 195
75.0% 202
77.5% 209
80.0% 216
82.5% 222
85.0% 229
87.5% 236
90.0% 243
92.5% 249
95.0% 256
97.5% 263
100.0% 270
 capacity of 250 people. The airline sold 270 tickets for the flight at a price of Rs. 3000 per ticket. Tickets are non-
d costs and fuel costs) is Rs. 300 per passenger. If more than 250 people show up for the flight, the flight is over-booked
3500 per person to each overbooked passenger. Develop a worksheet that computes Budhha Airline's profit based on

250
270
3000
300
3500
810000
75000
Number of seats overbooked Overbooking Compensation
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 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
6 21000
13 45500
20 70000
ght at a price of Rs. 3000 per ticket. Tickets are non-
50 people show up for the flight, the flight is over-booked
orksheet that computes Budhha Airline's profit based on

Assumption
Fuel Cost and Food cost are fixed for a aircraft

Profit
735000
735000
735000
735000
735000
735000
735000
735000
735000
735000
735000
735000
735000
735000
735000
735000
735000
735000
735000
735000
735000
735000
735000
735000
735000
735000
735000
735000
735000
735000
735000
735000
735000
735000
735000
735000
735000
735000
714000
689500
665000
 1.         A drug company believes a new drug will sell 10,000 units during 2012. They expect two competitors to
which the first competitor enters, the company expects to lose 30 percent of its market share. The year in whic
the company expects to lose 15 percent of its market share. The size of the market is growing at 10 percent pe
in which the two competitors enter, develop a worksheet that computes the annual sales of the company

Year of entry Market Share

Company A 2012 10000
Competitor 1 2013 30%
Competitor 2 2021 15%

Increment in Market Size 10%

2012
Market Size 10000
Market Share 10000
hey expect two competitors to enter the market. The year in
arket share. The year in which the second competitor enters,
et is growing at 10 percent per year. Given values of the years
e annual sales of the company for the years 2012–2021.

2013 2014 2015 2016 2017 2018

11000 12100 13310 14641 16105 17716
7700 8470 9317 10249 11274 12401
 2019 2020 2021
19487 21436 23579
13641 15005 14030
It is June and the IPL is down to the final 4 teams. Ravi is a t-shirt vendor who plans to order t-shirts with
the names of the final 4 teams from a manufacturer and then sell them to the fans. The fixed cost of any
order is Rs. 10000, the variable cost per t-shirt to Ravi is Rs. 200, and Ravi’s selling price is Rs. 500.
However, this price will be charged only after a week of the tournament. After that time, Ravi’s guess is
that the interest in t-shirts will go down. So, he plans to sell all remaining t-shirts at Rs. 150. His best
guess is that the demand for the t-shirts during the full price period will be 1500. He is thinking about
ordering 1400 t-shirts.
Build a spreadsheet model for Ravi which will let him experiment with uncertain demand and his order
quantity.
 o order t-shirts with
The fixed cost of any
ice is Rs. 500.
time, Ravi’s guess is
Rs. 150. His best
is thinking about

mand and his order