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calculate step by step Ms. Jenny Joy is planning to open her first own business project: a little caf close to the university district of
calculate step by step
Ms. Jenny Joy is planning to open her first own business project: a little caf close to the university district of the imaginary town of Brightside. She has rented a small, but nice venue for the caf. She has worked hard to keep the target opening date of 1 June. There is a very important report missing from her paperwork though; she does not know how much profit she can expect during the first 3 months of operation. She remembers from university finance class that the best way to prepare a profit plan is to consider different scenarios. She has gathered all the relevant information for the profit analysis and for the sake of simplicity estimated two possible outcomes: "good" and "almost good. Information about costs and revenues: Average revenue from drinks and food: 22 per person Cost of drinks and food: 14 per person Rent fee: 1000 per month Utilities: 1200 per quarter She does not plan to hire employees in the first three months. Renting the coffee machine: 6000 per year Other costs: 3000 in the first month and 5% less in every upcoming month Probability of Number of guests PER scenario DAY (assume 20 working days per month) Good scenario 55% 40 Almost good scenario 45% 30 Required: 6.1) Prepare a monthly analysis of Ms Joy's profits based on her revenues and costs for the three months under both scenarios. (Please show all needed calculations and explanations) 6.2) Calculate her expected profit for the quarter 6.3) Name what are the variable and fixed costs from the above listed cost elements? Explain your answer. 6.4) Give two examples: one example of semi variable and one example of stepped costs that can be linked to the operation of the cafeStep by Step Solution
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