Question
A businessperson would like to open a Mexican restaurant in Bemidji MN. Buying new equipment for the restaurant would cost $190,000 (first cost). In 10
A businessperson would like to open a Mexican restaurant in Bemidji MN. Buying new equipment for the restaurant would cost $190,000 (first cost). In 10 years, the owner can sell the restaurant for $70,000 (salvage value). A yearly equipment maintenance is $40,000 per year. There is a cleaning cost of $260 per day. Another option for opening the restaurant is renting the necessary machines for $1100 per day. If the restaurant opens 6 days a week, find how days per year are needed to justify purchasing the equipment? Use an interest rate of 10% per year.
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