Question
2. Chipotle, Inc. recently introduced a delivery service. Consequently, each restaurant has to buy two cars which cost $18,000 each, and can be depreciated
2. Chipotle, Inc. recently introduced a delivery service. Consequently, each restaurant has to buy two cars which cost $18,000 each, and can be depreciated in straight line for 4 years with a salvage value of $6,000 (which can be realized in the fifth year and pays zero tax). The operation costs of the delivery service are $5,000 per year, and its variable cost is $0.50 per delivery. The average charge for each delivery is $2.00. Chipotle's tax rate is 21%, and it uses a 8% discount rate. How many meals does Chipotle need to deliver each day before break-even? (Compare the accounting approach number to the present value approach number)
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