
A nonprofit must choose one of two fundraising options. Option A (Gala): capacity 100 attendees; fixed cost $20,000; variable cost $100 per attendee. Donor segments: High (H) donate $1,000 each; Low (L) donate $250 each. Among the general donor pool, 80% are L and 20% are H. If k of the 100 gala attendees are H, the rest are L. Option B (Online campaign): reach 1,000 people; fixed cost $8,000; variable cost $1 per person reached. Of the 1,000 reached, 80% are L and 20% are H. Conversion rates and average gifts: L convert at 8% and donate $50 on average; H convert at 15% and donate $500 on average. Questions: