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Edited Question: Spreadsheet Modeling for Business Decisions by John F. Kros (fourth edition) - Chapter 2 Problems, Question #8. You are thinking of opening a
Edited Question:
Spreadsheet Modeling for Business Decisions by John F. Kros (fourth edition) - Chapter 2 Problems, Question #8.
You are thinking of opening a copy shop. It costs $8,000 to rent a copier for a year. It costs $0.023 per copy to operate the copier. | ||||||||||||
Other fixed costs of running the store amount to $600 per month. You charge an average of $0.12 per copy. You are open 365 days per year. | ||||||||||||
Each copier can make up to 150,000 copies per year. | ||||||||||||
a. Using Excel, construct a two-way profit table (numbers of copiers on the left running top to bottom and daily demand on the top running from left to right) for | ||||||||||||
1 to 5 copiers rented and daily demands of 1000, 1500, 2000, and 2500 copies per day. That is, compute annual profit for each of these combinations of | ||||||||||||
copiers rented and daily demand. | ||||||||||||
b. Given that you rent three copiers, what daily demand for copies will allow you to break even? Draw a break-even graph to show this break-even relationship. |
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