Health Cruises Case Essay

1473 WordsJan 29, 20126 Pages
Health Cruises Case Read the Health Cruises Case and submit answers to the following questions. 1. What is the minimum number of passengers Health Cruises must sign up by November 20th to break even? [show your calculations] Considering that an average ticket price is $1500 and the cost per passenger is $200, each sold ticket generates $1,300 of the positive cash flow. Since $295,000 of the initial capital had been spent by November 14th, the following minimum number of passengers must sign up in order for Health Cruises to break even provided no more money is invested: Minimum passengers to break even = $295,000 / $1,300 = 227. 2. Should Health Cruises go ahead with the cruise since 200 people have signed up by…show more content…
Health Cruises, Inc. Health Cruises, Inc. packages cruises to Caribbean islands such as Martinique and the Bahamas. Like conventional cruises, the packages are designed to be fun. But the cruise is structured to help participants become healthier by breaking old habits, such as smoking and overeating. The Miami-based firm was conceived by Susan Isom, 30, a self-styled innovator and entrepreneur. Prior to this venture, she had spent several years in North Carolina promoting a behavior-modification clinic. Isom determined that many people were very concerned about developing good health habits, yet they seemed unable to break away from their old habits because of the pressures of day-to-day living. She reasoned that they might have a chance for much greater success in a pleasant and socially supportive environment, where good health habits were fostered. Accordingly, she established Health Cruises, Inc., hired 10 consulting psychologists and health specialists to develop a program, and chartered a ship. DeForrest Young, a Miami management consultant, became the chairperson of Health Cruises. Seven of Isom’s business associates contributed an initial capital outlay totaling more than $250,000. Of this amount, $65,000 went for the initial advertising budget, $10,000 for other administrative expenses, and $220,000 for the ship rental and crew. Mary Porter, an overweight Denver schoolteacher, has signed up to sail on a
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