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Three entrepreneurs were lookIng to start a new brewpub near Sacramento, Californla, called Rosevlle Brewing Company (RBC). Brewpubs provlde two products to customers-food from the restaurant segment and freshly brewed beer from the beer production segment. Both segments are typically in the same bullding. which allows customers to see the beer-brewing process. After months of research, the owners created a financlal model that showed the following projections for the first year of operations. In the process of pursulng capital through prlvate Investors and financlal Institutions, RBC was approached with several questions. The following represents a sample of the more common questions asked: - What is the break-even point? - What sales dollars will be required to make $240,000 ? To make $480,000 ? - Is the product mlx reasonable? (Beer tends to have a higher contributlon margin ratio than food, and therefore product mlx assumptions are critical to profit projections.) - What happens to operating profit If the product mlx shifts? - How will changes in price affect operating profit? - How much does a pint of beer cost to produce? It became clear to the owners of RBC that the Initlal financlal model was not adequate for answering these types of questions. After further research, RBC created another financlal model that provided the following Information for the first year of operations. Required: Perform a sensitlivity analysls by answering the following questlons: a. What is the break-even point in sales dollars for RBC? b. What is the margin of safety for RBC

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