Question

	Little Leaguers	Summer Sluggers	Elite Ballplayers (Print Ad)	Elite Ballplayers (Party)	Entertainment Seekers
Contact Cost	¥1,000	¥1,500	¥300	¥12,500	¥50
Response Rate	10.0%	15.0%	0.5%	25.0%	2.5%
Acquisition Cost	???	???	???	???	???
Workers Needed	2	1	1	1	2
Worker Labor Cost	¥1,500	¥1,500	¥1,500	¥1,500	¥1,500
Instructors Needed	1	0	1	1	0
Instructor Hourly Labor Cost	¥3,000	N/A	¥4,500	¥4,500	N/A
Total Cost Per Hour	10,000	10,000	60,000	50,000	2,000
Hourly Price Charged	¥6,500	¥3,000	¥7,500	¥7,500	¥4,000
Hourly Margin ¥	500	1,500	1,500	1,500	1,000
Hourly Margin %	8%	100%	25%	25%	33%
Annual Hours	10.0	4.0	20.0	20.0	1.5
Annual Margin ¥	5,000	6,000	30,000	30,000	1,500
Retention Rate	75.0%	50.0%	60.0%	60.0%	35.0%
Interest Rate	10.0%

without discounting cash flows to take into account the time value of money, how soon will MBC break even on the following customers? I all cases, assume that revenues and variable cost to staff the cages occur on an ongoing basis but that the acquisition costs are a one-time event.

a. Little Leaguer b. Summer Slugger c. Elite Ballplayer (print ad) d. Elite Ballplayer (party) e. Entertainment Seeker

Answer 1