Case_In_Point_7th_Edition_Page001_183_2

Well, first we have the membership fee. We start with 1,265 people paying $1,000 a year in
membership fees. So that equals $1,256,000.
– I was glad to see that you could do the math in your head.
Next, we have 18 hours a day times 30 days equals ... 540 hours a month of available batting
cage time. I’ll assume that on Fridays, Saturdays and Sundays the cages are in use 90% of the
time. And since there is no difference between the hourly rates — they both equal out to $100
an hour — I’ll figure this on an hourly basis. So, 90% of three times 18 times $100.
Three times 18 equals 54 hours. 90% of 54 equals around 49 hours if I round up.
Say, 50 hours times $100 equals $5,000. Then I multiple it by four weekends in a month and I’ll
get $20,000 a month.
– Really?
You think that’s too high?
– I think it’s too low.
Too low? A 90% occupancy rate is too low?
– The 90% is fine; the total is too low.
Checks his notes on the page.
Ah, you must be referring to the fact that there are six cages and so far my numbers are just for
one cage. I was getting to that.
– Strike one.
Okay, $30,000 (5,000 x 6 cages) times four weekends equals $120,000 a month or $120,000
times 12 months equals $1,440,000.
Now let’s look at Monday through Thursday. I’ll say it’s full from 6 am to 9 am — people going
before work. It’s full from 11 to 2, a lunchtime break — that’s another three hours. And it’s full
from 6 to midnight — that’s six more hours. I’ll estimate that it is busy 12 hours a day, times
$100 equals $1,200 a day, times four days a week — $4,800 — times four weeks equals .
$19,200 a month.
– Really?