Craddock Cup

1. The Craddock transfuse in its cur contain form should be act in order to maximize CYSLs expediencys. Although it looks as though the form is incurring a loss, we motivating to analyze the relevant and moot cost to truly determine the financial impact of discontinuing the cup. Although total expenses atomic number 18 $53,538, we need to eliminate the irrelevant, or unavoidable, costs when deciding whether the form should continue. In this case, the irrelevant, unavoidable costs imply Rivaldos salary entirelyocated to the tournament ($6,300), the field rental cost for the week ($1,200), and the rent/utilities expense for the Cup ($2,700).When these costs are added, we run short $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 get $43,338 in relevant costs. When you subtract these expenses from the revenue generated by the tournament, we end up w ith a relevant profit of $6,502. This means that the CYSL is making $6,502 more than than it would if it eliminated the Craddock Cup. I would wherefore recommend that the Craddock Cup be continued. 2.My answer to the first question would change if the alternative to holding the Craddock Cup would be to rent the field to the Harvest sporting for $6,750. From purely a financial perspective, renting the field to the Harvest Fair would make the most sense. By doing this, the CYSL can make 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 hosting the Craddock Cup. . When considering the decisions that management needs to make, it is important to consider not only the quantitative data, nevertheless also the qual itative characteristics. 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 people that come to the tournament are advantageous for the nearby businesses. The economic advantages of the event would leave the town worse off than before. Also, the experience and opportunities that the Cup provides to high school association football 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 like to avoid firing anyone if at all avoidable. Lastly, the potential for future network as the tournament gains more recognition and prestige should be plentiful to make CYSL keep runni ng the Craddock Cup annually. 4. Exhibit A shows the expected financial impact of adding 32 more teams to the schedule.Revenues would increase to $85,680 (assuming while expenses would rise 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 expected 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 security deposit 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 lower profit margin, it has higher overall profits and is recommended. Exhibit A (64-Team Financials) RevenuesCalculations Registrati on Fees18,880Doubled T-Shirts 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 palm 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 Face Books 570450+(95-75)x$6 Marketing 3,2002,200+ molar concentration CYSL Salaries18,300Same (Fixed) CYSL Rent 2,700Same (Fixed) Total Expenses87,806 Net Income($2,126) Irrelevant/Unavoidable Expenses Field Rental 1,200 CYSL Salaries 6,300 CYSL Rent 2,700 Total Irr. Exp. 10,200 pertinent Expenses 87,806-10,200=77,606 Relevant Profit Revenue85,680 Rel. Exp77,606 Rel. Profit 8,074