Here is the ?
Royal Rumble Productions has just finished production of Feature Creatures. The total production cost was $5 million. All actors and personal receive a fixed salary(included in the $5 million) Media Productions will handle marketing and agrees to invest $3 million of its own money. They will be paid 20% of revenues Royal Rumble itself receives from the box office. Royal Rumble receives 62.5% of the total box-office receipts(out of which comes the 20% payment to Media Productions.)
1. What is the Break even point to Royal Rumble expressed in terms of (a) revenues received by Royal Rumble, and (b) total box-office receipts?
2. Assume in its first year of release, the box-office receipts total $300 million. What is the operating income to Royal Rumble from the movie in its first year?
