Media outlets often have web sites that provide in-depth

Media outlets often have web sites that provide in-depth coverage of news and events. Portions of these web sites are restricted to members who pay a monthly subscription to gain access to exclusive news and commentary.

These web sites typically offer a free trial period to introduce viewers to the web site. Assume that during a recent fiscal year, one outlet spent $3,793,160 on a promotional campaign for its web site, offering two free months of service for new subscribers. In addition, assume the following information:

  Number of months an average new customer stays with the service
       (including the two free months)   22 months
  Revenue per month per customer subscription $21
  Variable cost per month per customer subscription $7

Determine the number of new customer accounts needed to break even on the cost of the promotional campaign. Informing your answer, (1) treat the cost of the promotional campaign as a fixed cost, and (2) treat the revenue less variable cost per account for the subscription period as the unit contribution margin.

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