Breakeven Analysis Project Summer 2020

A local zoo,thanks to a new breeding program for endangered species, has successfully birthed two new, healthy elephants. The zoo
will spend several years preparing these elephants to be released into the wild. While they are preparing these elephants for their
eventual release, the zoo has noticed an increase in attention for these beautiful creatures. In order to expand revenue for their
breeding program to include other endangered species,they have plans to create a new enclosure area so the elephants can play and
grow, while visitors observe them. The zoo asks your company specifically to provide a program that can perform a breakeven
analysis on the different materials and construction methods, and determine the expected return on investment. This analysis will
aid in predicting what other species can be added using the profit from this new enclosure. Specifically, your program must consider
construction costs (fixed costs), various operational costs (variable costs), and the revenue dependent on interest level of the public.

Calculation Procedure for Construction ( Fixed Cost)

The program that you create will perform a complete Breakeven Analysis for a single construction option. Your team then should
be able to perform several complete Breakeven Analyses in order to provide the final financial benefits of a single construction option.
To begin, your team must calculate the total cost of construction for three different construction materials. The total construction
cost will be the “fixed cost” of your analysis. To begin, there will be 3 construction materials to choose from and all the information
MUST be contained within one 3 x 7 cell array. The cell array will be organized as below (do NOT include the titles highlighted in
gray):

The program should use a menu listing three material options: Concrete, Wood, or Adobe, pulled from the cell array. You
may NOT hard code or use an “if statement/switch statement” to retrieve these names. This menu should automatically
change should the cell array be altered as to the number and types of materials.
• The program should set the total surface area of the wall to be 3000 square feet.
• The program should then calculate the total cost of construction considering all costs above, in appropriate units. You
should use this total as your fixed cost.
Note: In all your calculations, your numbers should be able to automatically adjust should more materials be added to the cell
array. No credit will be given to hard coded values or the use of “if statements/switch statements” or the use of “loops.”

Breakeven Analysis ( Variable Costs and Revenue Details)

The program that you create will then perform the rest of the Breakeven Analysis for the single construction option specified by
the user. Each option has a specific amount of variable costs that are listed later in this document (under the “Options to
Consider” section). These variable costs should be entered as user-inputs ratherthan hardcoded or entered into the cell array above.
They must be “free form” input by the user (should the costs change in the near future). The inputs are listed below:
• The program should now ask the user to enter the following information relating to the operational (variable) costs,
operational schedule, and number of years for the analysis:
o Energy cost [$/week]
o Labor cost [$/week]
o Maintenance cost [$/week]
o Landfill cost [$/week]

Breakeven Project – 3

Breakeven Analysis ( Process)
Summary of Results
o Number of weeks per year the zoo will operate
o Number of years the analysis should include (this is INDEPENDENT of the construction time. Your analysis at time
zero should be OPENINGDAY)
• The program should finally ask the user to enter the zoo’s anticipated public interest and donations, which will be used to
calculate revenue:
o Price of admission per person [$/person]
o Number of people per week that will visit the zoo
o Expected donations per week [$/week]

Breakeven Analysis ( Process)

The program should conduct a breakeven analysis using these steps:
• Determine the total fixed costs to construct the enclosure considering material costs, miscellaneous costs, and labor
costs
• Determine the total variable cost of operating the enclosure per week.
• Determine the total costto operate the selected construction option forthe number of years requested by the user(the
time does NOT include construction time).
The total cost vector should be calculated for the number of years requested, where each column is a year.
• Determine the total revenue for the number of years requested by the user.
The total revenue vector should be calculated for the number of years requested, where each column is a year. The
calculation should include the donations
• Determine the total profit for the number of years requested by the user.
The total profit vector should be calculated for the number of years requested, where each column is a year.
The program should now determine the breakeven point in months. This should be accomplished by creating a mathematical
formula to express the breakeven point as a function of cost.
The program should also, at the request of the zoo, determine how much of a one-time donation it would take to “breakeven” at the
end of 7 months. You may assume that none of the given options will break even in less than 6 months.