Negotiating the fee for the kfbs allstars is an

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4.) Negotiating the fee for the KFBS Allstars is an important strategic decision for ALLTEL Pavilion. Perform each of the following three independent analyses regarding different fee arrangements and after completing the third, briefly comment on what the results of these three analyses suggest regarding whether the Pavilion is better off negotiating a “fixed-pay” contract with performers or a “per capita” contract with performers: A.) What is the maximum fixed fee that the Pavilion can pay the KFBS Allstars if the Pavilion wants to earn $45,000 operating income after 40 percent tax and still expects the show to have an average ticket price of $22.12? Assume the show is expected to draw 6,000 paying ticket holders.
B.) What is the maximum fixed fee that the Pavilion can pay KFBS Allstars if the Pavilion wants to earn $45,000 operating income after 40 percent tax and still expects the show to have an average ticket price of $22.12? Assume, including the same 25 percent comp tickets (i.e., 4:1 mix as before), the show is expected to be a sell-out.

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