Instructions:

As a team of aspiring entrepreneurs, you have been tasked with evaluating three potential business opportunities:

a restaurant,

a retail store, and

a real estate agency. Your goal is to use managerial accounting principles to analyze the financial viability of each business and make a recommendation. The following information is available for each business opportunity:

Restaurant:

Start$-$up costs: $$200,000$

Monthly operating costs: $$50,000$

Revenue per customer: $$20$

Average number of customers per month: $1,000$

Break$-$even point: $500$ customers

Retail Store:

Start$-$up costs: $$150,000$

Monthly operating costs: $$30,000$

Revenue per sale: $$50$

Average number of sales per month: $500$

Break$-$even point: $500$ sales

Real Estate Agency:

Start$-$up costs: $$300,000$

Monthly operating costs: $$80,000$

Revenue per sale: $$200,000$

Average number of sales per year: $10$

Break$-$even point: $5$ sales

To complete this assignment, you will need to:

Calculate the break$-$even point for each business opportunity.

Determine the profit or loss for each business opportunity at the break$-$even point and various levels of sales or customers.

Compare the financial viability of the three business opportunities and make a recommendation to your team.

Prepare a professional report that includes the following sections:

Introduction: Provide an overview of the report's purpose and the business opportunities being evaluated.

Break$-$even analysis: Present the results of your break$-$even analysis for each business opportunity.

Profit or loss analysis: Present the results of your profit or loss analysis for each business opportunity.