You have been provided an Excel file (called Ticket Sales.xlsx available on Moodle) showing
the forecast for average number of tickets per game that could potentially be sold from
2022 to 2041.
The demolition and building of the new stand will incur a fixed cost of £55 million. The fixed
cost includes the construction of 3,000 seats (a minimum requirement), restaurants,
meeting facilities, and bars.
The owners have the option of further increasing the capacity. For every additional 1,000
seats, the variable cost is £3 million (e.g., a 7,000 seat stand would cost £67 million). The
maximum allowable capacity of the new stand is 10,000 seats.
Your clients have informed you that they are planning to draft a contract stipulating that
30% of the project's costs must be paid the day building works start (1 July 2022). A further
10% will be payable when work is completed (1 April 2024, just in time for the 2024 season).
The remaining costs need to be paid in equal monthly payments at the end of each month
during construction.