Paul wants to start a barbershop. He would like to have an extra $450 per month to help with his house payments. He has found a location that will rent him space for $425 per month, plus an additional $100 for electricity and water. He will need a capital investment of $360 for the necessary clippers and equipment that he will depreciate over the first year in equal amounts. In addition, he will need small items such as towels, combs, and so on. This cost will be about $240 per year. He adds $100 per month for miscellaneous expense items that may pop up throughout the month.

a. Help Paul fill in the budget forecast that will show his monthly and yearly revenues with the numbers outlined in the problem statement.

b. How much does he need in gross revenue per month to obtain the $450 profit per month?

c. If he charges $12 per haircut, how many haircuts will he need to perform to make his $450 profit per month?

d. Using the principles in a sensitivity budget, what would Paul have to charge to perform only 75 haircuts and still reach his $450 profit per month?

e. How many haircuts must be done to make $600 profit per month, assuming he charges $15 per haircut?

f. For data analytics and visualization, create a pie chart to analyze Paul’s expenses.

g. In the predictive analytics performed in steps (b) to (e), what other nonfinancial information would be useful for decision making?

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Revenue Expense Rent Electric/Water Depreciation Budget Forecast Other small items Misc Items Total Expenses Net Profit/Loss Month Year 450 5,400