Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Jo owns Cluck You!, a food truck specializing in fried chicken and chicken wings. The truck has been very successful and currently generates $500 per

Jo owns Cluck You!, a food truck specializing in fried chicken and chicken wings. The truck has been very successful and currently generates $500 per day in revenue. Jo is considering adding a second truck to the business. She estimates that the second truck would generate $300 per day. However, some of this revenue would be from current customers of the first truck; she estimates that if she opens the second truck, the daily revenue from the first truck would fall to $400 per day. Additionally, Jo estimates that to purchase the second truck, hire and train employees, and get the second truck up and running, she will need to close down the first truck for five (5) days, meaning she will generate $0 revenue for each of these days instead of $500 revenue for each of these days. (4 points) If Jo opens the second truck, what is the opportunity cost of the first 30 days of operation? (4 points) If Jo does not open the second truck, what is the opportunity cost of operation? (2 points) If you were advising Jo, would you recommend opening the second truck or not? Why or why not

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

Transport Operations

Authors: Allen Stuart

2nd Edition

978-0470115398, 0470115394

More Books

Students also viewed these General Management questions

Question

=+ c. What happens to investment in Oceania?

Answered: 1 week ago