Activities - Grade 7

Let's Play Ball

 

  1. You've just become the president of the local professional baseball team.
     
    The team is beginning its second year of operation.
    You are entering the year as president with a team debt of $400 000.
    You must have a balance of $0 or better at the end of your first year as president of the team.
     
  2. Facts:

Stadium seating capacity:  6700 with 3000 seats in the red section, and 3700 seats in the blue section.

Last years expenses:

Team payroll

$1 650 000

Travel

$420 000

Rent, marketing, equipment etc.

$500 000

Average attendance for 48 home games:

Red seats

800 @ $15

Blue seats

2000 @ $9

•  Using last year's expenses and average attendance figures you decide to increase your marketing costs by $100 000 in order to better promote the team.
 
You believe that increased promotion will improve the attendance by at least 10%.
You also decide to raise both the red and blue ticket prices by $1.
 

  1. Will you achieve a $0 or better balance after your first year?  Show all calculations to justify your decision.