10.2 Increment Analysis:Founded in 1985, Starbucks Corporation offers brewed coffees, espresso beverages, cold blended beverages, various complementary food items, and related products at over 12,000 retail outlets in the United States Canada, the United Kingdom, Thailand, Australia, Germany, China, Singapore, Puerto Rico, Chile, and Ireland. Over 100 outlets are featured in the Greater Chicago Land area alone. For a new unit in Chicago's O'Hare Airport, suppose beverage customers spend an average $4 on beverages with an 80 percent gross margin, and food customers spend an average $5 on sandwiches and salads with a 50 percent gross margin. In both cases, gross margin is simply price minus input cost and does not reflect variable labor and related expenses. Customer traffic throughout the day is as follows:

Hour of Day	Beverage customers	Food Customers	Profit Contribution($)
06:00	150	50	605.00
07:00	250	100	1050.00
08:00	200	75	827.50
09:00	175	50	685.00
10:00	100	25	382.50
11:00	200	75	827.50
12:00	200	175	1077.50
13:00	125	150	775.00
14:00	75	75	427.50
15:00	50	50	285.00
16:00	100	25	382.50
17:00	75	50	365.00
18:00	50	75	347.50
19:00	50	25	222.50
20:00	25	25	142.50
21:00	25	10	105.00
22:00	25	10	105.00
Total	1,875	1,045	8,612.50

A.Assume labor, electricity, and other incremental costs are $175 per hour of operation; calculate the profit-maximizing hours of operation per day.

B.Assume the store is open 365 days per year, and that incremental rental costs are $2 million per year. Calculate optimal incremental profits. Should Starbucks close this site?