Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

How would I calculate demand and cost for the Taffy Puller and Churro Maker using excel? Billington Bakegg Part 2 Since we last visited 3mm

image text in transcribed

How would I calculate demand and cost for the Taffy Puller and Churro Maker using excel?

image text in transcribed
Billington Bakegg Part 2 Since we last visited 3mm Bakery, Brad has decided to a new machine to the front window of the bakery to attract customers from off the street. Brad is considering purchasing either an automatic taffy puller or churro maker. At this time, Brad can only afford to purchase one machine. The following gives some information regarding each machine. The taify puller will require an initial investment of $25,000. Brad expects the base demand for the bags of taffy to be 40,000 bags per year with a decrease of 8,000 bags sold per year for every dollar the price increases beyond $0.00. At this time, Brad expects the total cost for each bag of taffy to be $1 .00/bag. The churro maker will require an initial investment of $18,000. Brad expects the base demand for the churros to be 60,000 per year with a decrease of 15,000 churros sold per year for every dollar the price increases beyond $0.00. At this time, Brad expects the total cost churros to be $0.50feach. In addition to the information above, Brad expects base demand for either snack to increase 5% every year after the rst year. Your assignment is to evaluate which machine will be more protable for Brad over the next 5 years. At this point do not factor in depreciation, just use basic cash ows for the use of the machines. You may also wish to consider that if Brad decides not to purchase either machine, he has the opportunity to invest his money in a friend's business with an expected return of 8% over the ve year period. To complete this assignment you are required to create a spreadsheet showing your calculations. Your spreadsheet should be professionally formatted in such a way as to make your conclusions easy to understand. You also need to create a professionally worded memo to Brad explaining your findings

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered 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

Advanced Financial Accounting

Authors: Thomas Beechy, Umashanker Trivedi, Kenneth MacAulay

6th edition

013703038X, 978-0137030385

Students also viewed these Finance questions

Question

Define Heideggers terms throwness, Mitwelt, and Umwelt.

Answered: 1 week ago