Eastman Publishing Company is considering publishing an electronic textbook abou

Question

Eastman Publishing Company is considering publishing an electronic textbook about spreadsheet applications for business. The fixed cost of manuscript preparation, textbook design, and web-site construction is estimated to be $170,000. Variable processing costs are estimated to be $5 per book. The publisher plans to sell single-user access to the book for $45.

(a)

Build a spreadsheet model in Excel to calculate the profit/loss for a given demand. What profit can be anticipated with a demand of 3,700 copies?

For subtractive or negative numbers use a minus sign. ______

(c)

Use Goal Seek to answer the following question. With a demand of 3,700 copies, what is the access price per copy that the publisher must charge to break even?

If required, round your answers to two decimal places. ____

(a)

Build a spreadsheet model in Excel to calculate the profit/loss for a given demand. What profit can be anticipated with a demand of 3,700 copies?

For subtractive or negative numbers use a minus sign. ______

(c)

Use Goal Seek to answer the following question. With a demand of 3,700 copies, what is the access price per copy that the publisher must charge to break even?

If required, round your answers to two decimal places. ____

Explanation / Answer

a) here total cost =fixed cost+quantity*variable cost=170000+5*3700=188500

and total revenue =45*3700=166500

hence expected profit =revenue-cost =166500-188500=$-22000

b)let x be access price

for break even revenue=profit

3700x=188500

hence x=188500/3700=$50.95

please let me know if further clarification is required or needed any help in doing this in excel

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