Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

how much money can you expect to make in this industry? Is it realistic to assume that a startup vending machine operator will generate profits

how much money can you expect to make in this industry? Is it realistic to assume that a startup vending machine operator will generate profits

  • Assume the average new vending machine lasts five years and is treated with straight-line depreciation.
  • Assume each machine is refilled twice per month and that it takes roughly two hours of direct labor each time.
  • Most operating expenses are included in the article but you may want to add any important costs that are neglected.
  • Ignore the following statement that appears in the article, which may be misleading: "All costs considered, an operator who makes $5k per month in revenue might take home something like $2k in profit." Your task is to independently figure out how much money can be made.
  • General liability insurance (~$500/yr for <$100k in annual sales)
  • Commissions paid to locations (5-25% of revenue)
  • Transaction fees for card purchases (~5-6%)
  • Card reader analytics fees ($10/mo)
  • Storage space for unused machines (~$100/mo)
  • Gas and transportation ($50-$100/mo)
  • Taxes (10-37% of adjusted gross income)
  • Routine maintenance and vandalism repairs ($50-$250/yr)

provide a quantitative analysis of the profit potential for a vending machine operator based on the information given above

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Cost Benefit Analysis

Authors: Harry F. Campbell, Richard P.C. Brown

3rd Edition

1032320753, 9781032320755

More Books

Students also viewed these Finance questions

Question

Is a consolidated statement of financial positon meant to balance

Answered: 1 week ago

Question

8.10 Explain several common types of training for special purposes.

Answered: 1 week ago