Eastan 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 $150,000.Variable processing costs are estimated to be $7 per book. The publisher plans to sell single-user access to the book for $49.Through a series of web-based experiments, Eastman has created a predictive model that estimates demand as a function of price. The predictive model is demand = 4,000 - 6p, where p is the price of the e-book.(a) Build a spreadsheet model to calculate the profit/loss for a given demand. What is the demand?(b) Use Goal Seek to calculate the price that results in breakeven. If required, round your answer to two decimal places.(c) Use a data table that varies price from $50 to $400 in increments of $25 to find the price that maximizes profit.If Eastman sells the single-user access to the electronic book at a price of Sit will earn a maximum profit of $

Given, Estimated price- $150000 Variable price- $7 Single user access- $49

Answered: Eastlan Publishing Company is…

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter13: Regression And Forecasting Models

Section13.3: Simple Regression Models

Problem 9P

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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 $168,000. Variable processing costs are estimated to be $4 per book. The publisher plans to sell single-user access to the book for $45. Through a series of web-based experiments, Eastman has created a predictive model that estimates demand as a function of price. The predictive model is demand 4,000-6p, where p is the price of the e-book. (a) Construct an appropriate spreadsheet model for calculating the profit/loss at a given single-user access price taking into account the above demand function. What is the profit estimated by your model for the given costs and single user access price (in dollars). (b) Use Goal Seek to calculate the price (in dollars) that results in breakeven (Round your answer to the nearest cent.) (c) Use a data table that varies price from…
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