pls do it in. excel format Lincoln Alumni cruises offers luxury trips along the

Question

pls do it in. excel format

Lincoln Alumni cruises offers luxury trips along the . Lincoln Alumni Cruises' cost of capital ts determine the operating costs and to thhp compaming a Mission Bay which was built 15 years ago for 590 MBA, Lincoln alumni decide to form their own out of San Fr and to the They are what to do with their existing ship, S S so be would cost $180M and its current market value is $150M and is now fully depreciated. To replace the Mission Bay Lincoin Alumni, dusting off some accou a two-week cruise to Alaska, which would be a chang were able to nting materials, from a three week cruise from travelling down to on 2,000 passengers per cruise and 25 cruises per year) PER CRUI Labor Food Fuel Variable Costs Fixed Costs 150,000 75,000 650,000 125,000 350,000 150,000 750,00O 750,000 Port fees and services Marketing, ads, promotion Supplies 500,000 a. Assumin g that the two-week Alaskan cruise will be priced at $2,000 per passenger, please calculate the break-even number of passengers per cruise based on the data above b. Wha at do the Lincoln Alumni need to consider beyond these estimates, and if they included this consideration, would happen to the break-even point? Would there be an issue if the max capacity of the ship was 2000 passengrs INT: Please calculate the OPPORTUNITY COST and compare against its capacity

Explanation / Answer

(a) Break even Number of Passengers at $2000 per passenger Variable cost per passenger = $2000,000 /2000 =$1000 contribution per passenger = price per passenger - variable cost per passenger =$2000-$1000 =$1000 break even number pf passengers per cruise = Fixed expenses per cruise / Contribution per passenger =$1,500,000/$1000 =1500 (b) What do Consider beyond these esimates and what hapend to break even point if they are considered. factors to consider in break even analysis They need to Consider the factor depreciation expense of the new cruise. This would increase the fixed cost hence the number of passengers required to break even also increse. This would increase the fixed cost hence the number of passengers required to break even also increse. there is No change in capacity , so No effect

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