Craddock Cup

1. The Craddock Cup in its authoritative form should be continued in identify to maximize CYSLs dough. Although it looks as though the Cup is incurring a loss, we need to test the relevant and irrelevant cost to truly determine the financial cushion of discontinuing the cup. Although total outlays are $53,538, we need to eliminate the irrelevant, or unavoidable, costs when deciding whether the Cup should continue. In this case, the irrelevant, unavoidable costs include Rivaldos honorarium allocated to the tourney ($6,300), the orbital cavity rental cost for the week ($1,200), and the rent/utilities expense for the Cup ($2,700).When these costs are added, we prepare $10,200 in sunk costs that cannot be avoided regardless of the continuation of the Craddock Cup. Subtracting these irrelevant costs from the total expenses of the tournament, we sign on $43,338 in relevant costs. When you subtract these expenses from the revenue generated by the tournament, we end up with a relev ant profit of $6,502. This means that the CYSL is making $6,502 more than it would if it eliminated the Craddock Cup. I would therefore propose that the Craddock Cup be continued. 2.My answer to the first dubiety would change if the alternative to holding the Craddock Cup would be to rent the field to the Harvest Fair for $6,750. From purely a financial perspective, renting the field to the Harvest Fair would rent the most sense. By doing this, the CYSL can influence a $6,750 profit, excluding the allocated costs that are unavoidable and irrelevant. This is $248 more than the $6,502 they would profit by actually holding the tournament. So strictly by financial terms, it would make more sense to rent out the field in order to generate an increase in profit of $248 over the alternative of militarying the Craddock Cup. . When considering the decisions that perplexity needs to make, it is important to consider not only the quantitative data, just now also the qualitative charact eristics. In this case, after considering the qualitative characteristics I would recommend that the CYSL continue to hold the Craddock Cup for multiple reasons. First of all, the influx of deal that come to the tournament are advantageous for the nearby businesses. The economic advantages of the gist would leave the town worse off than before. Also, the experience and opportunities that the Cup provides to heights school soccer players are too crucial to ignore.By giving players a chance to gain recognition from college scouts and potentially get a scholarship, the tournament allows them to achieve their goals of playing college soccer. Another factor that must be discussed is the firing of the Renee Jansten. We do not know her current financial situation and would similar to avoid firing anyone if at all avoidable. Lastly, the potential for future profits as the tournament gains more recognition and prestige should be bounteous to make CYSL keep running the Craddock Cup annu ally. 4. Exhibit A shows the pass judgment financial impact of adding 32 more teams to the schedule.Revenues would increase to $85,680 (assuming while expenses would explicate to $87,806. This leads to a reported net income of -$2,126. However, if we remove the irrelevant, unavoidable costs ($10,200), we get a relevant profit of $8,074. This is $1,572 more than the $6,502 relevant profit judge from a 32-team tournament. It would therefore be in the greater interest of the CYSL to host a 64-team Craddock Cup next year. 5. The profit beach for the 32-team tournament is 3. 62% higher than the profit margin for the 64-team tournament. For the 32 team tournament, the profit margin is $6,502/$49,840=13. 5%. For the 64 team tournament, the profit margin decreases to $8,074/$85,680=9. 423%. Although the 64-team alternative has the frown profit margin, it has higher overall profits and is recommended. Exhibit A (64-Team Financials) RevenuesCalculations adjustment Fees18,880Doubled T-Sh irts 9,600Doubled Concessions34,560Doubled Soccer Clinic 8,640Doubled Contributions14,000Same Total Revenue85,680 Expenses T-Shirts 3,840Doubled (Variable) Concessions17,280Doubled (Variable) Clinic 5,184Doubled (Variable) Insurance 4,608Doubled (Variable) Registration 1,500Same (Fixed)Field Rental 8,760(1200+6 handle x $210 x 6 days) Balls 864Doubled (Variable) Refs12,800Doubled (Variable) Trophies 1,800Doubled (Variable) Hotels 6,400$80x 2 nights x 15 + 4,000 side of meat Books 570450+(95-75)x$6 Marketing 3,2002,200+1000 CYSL Salaries18,300Same (Fixed) CYSL Rent 2,700Same (Fixed) Total Expenses87,806 Net Income($2,126) digressive/Unavoidable Expenses Field Rental 1,200 CYSL Salaries 6,300 CYSL Rent 2,700 Total Irr. Exp. 10,200 relevant Expenses 87,806-10,200=77,606 Relevant Profit Revenue85,680 Rel. Exp77,606 Rel. Profit 8,074