an insurance company (AOTI) contract with artists to exhibit their works to the
ID: 2349849 • Letter: A
Question
an insurance company (AOTI) contract with artists to exhibit their works to the public. AOTI has agreed to pay as well known artist a 20,000 $ commission for the right to exhibit his work for one month .1. AOTI pays an artist a $20,000 commission to display the artist's works. it sells 4,000 tickets at $6 each. assume that attendance is 10 percent more (4,400 people attended ). and 10 percent less (3,600 people attend the exhibition). calculate the percentage change in revenue and net income if the attendance increase or decreases 10 percents .
Explanation / Answer
4,000 4,400 3,600
Expected 10% more 10% Less
attendence attendence attendence
Revenue from sale
of tickets @$6 eac $24,000 $26,400 $21,600
Change in revenue +$2,400 -$2,400
%Change in revenue +10% -10%
Less : Cost $20,000 $20,000 $20,000
Net Income $4,000 $6,400 $1,600
Change in Net Income $2,400 -$2,400
%Change in Net Income +60% -60%
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