This assignment requires you to determine the viability of a proposal, critically evaluate the results of your calculations and make recommendations, in the form of a written report, to your general manager.

Budget €30 - €250 EUR
Bids 5
Average Bid €129

Marking scheme
The following marking scheme provides an indication of the criteria used in the marking
process. Generally, papers will be assessed against the following:
? presentation, which should be both logical and well structured;
? conclusions well drawn based on the data collected, computations performed
and results obtained; and
? indication that you show a clear comprehension of the subject matter.

Chris Christodoulou, general manager of the struggling premiership football side Chesterfield
Rovers, is considering the acquisition of Joey Fortune to help improve his team’s sagging
performance. Joey has played in Singapore for the last two years and is coming to the end of
his contract so there would be no transfer fee involved if he was to be hired. Joey, a prolific
goal scorer, is holding out for a ten year contract with demands of an immediate and onetime payment of €200 000 as a signing on fee and €1 000 000 salary in the first year. Joey
expects his salary to increase by 10% each year.
Chris figures that hiring Joey will increase ticket sales by 35 000 each year. Tickets sell for
€20 per game and the total variable costs associated with each spectator amount to about
€5 per game. In addition, Chris is certain that, with Joey, his team will have a good cup run
each year. A good cup run means sales of at least 50 000 additional tickets that will sell for
€30 each. The variable cost is unchanged from a normal match. Because Chesterfield Rovers
have the highest ticket prices in the league and would operate at capacity if Joey were
signed, Chris does not expect these numbers to change over the life of Joey’s contract.
Chris’ only concern is that Joey is demanding a guaranteed contract – that is, he will be paid
whether he plays or not. Chris is virtually certain that Joey will play for seven years.
However, he is uncertain of the possibilities after that but certain that ticket sales will revert
to their current levels whenever Joey stops playing.

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