Estimate Revenues and Costs for New Amusement Park Launch
Overview
This question evaluates financial modeling, back-of-the-envelope estimation, unit-economics assessment, and sensitivity analysis skills applied to estimating revenues, costs and profitability for a capital investment.
Capital One
Aug 4, 2025, 10:55 AM
Data Scientist
Onsite
Analytics & Experimentation
0
0
Amusement Park Case: Revenue, Costs, Profit, and Go/No-Go
Context
You are advising an amusement-park operator evaluating whether to build and launch a new regional park. Provide a structured, back-of-the-envelope financial model using clearly stated assumptions. Your goal is to estimate annual revenues, costs, and profit, and to make a recommendation on whether to proceed.
Task
- State all assumptions (market size/attendance, prices, per-capita spend, operating days, etc.).
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Estimate annual revenues from:
- Ticket sales
- Food & beverage (F&B)
- Merchandise
- Parking
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Estimate annual costs, split into fixed vs. variable:
- Fixed: build/capex treatment (e.g., depreciation or capital charge), baseline operations, maintenance, salaried staffing, insurance/taxes, marketing
- Variable: hourly staffing, F&B and merchandise COGS, utilities/consumables, payment processing, parking ops
- Calculate expected annual profit under a base case.
- Perform a simple sensitivity/break-even analysis (e.g., required attendance to break even; impact of ticket price changes).
- Recommend proceed vs. do-not-proceed and note key risks or levers that could change the decision.
Assume reasonable, clearly justified numbers if not provided.
Solution
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