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In Chapter 11, we covered CVP analysis. This technique is commonly used in shorter-term decision-making, for example pricing changes, finding out the output required for a target profit.   However, the relationships between costs, volumes and profits is also important in the longer term too.  Time  magazine (Sep 3, 2012) reported on the fate of Disneyland Paris.  Since it opened in the early 1990’s, Disneyland Paris has posted losses almost every year – although the losses are getting smaller in more recent times. In the article, it explains one of the reasons for the on going losses. It seems Disney’s projected income figures were (and possibly still are) too high. The estimates were based on their experiences at their US and Japanese theme parks – where apparently people stay several nights in the on-site hotels. In contrast, the Paris resort has many more day-trippers.  So, in CVP terms, Disney may have known its fixed costs for the Paris resort over time, but the corresponding revenue figures were over optimistic. How to solve this problem – well they cannot do much about their fixed costs, but they are constantly trying to increase revenues with off-peak hotel and admission price deals.