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lear my Consider this situation. A friend of yours has decided to start a small business. They have some money to invest, but do not
lear my Consider this situation. A friend of yours has decided to start a small business. They have some money to invest, but do not have unlimited funds. The business will pecally pet food supplier catering to customers who are willing to pay a premium for anything related to their pets. The company expects to sell 500 units per mo or the first six months, then 1.000 units per month for six months, and then 2,000 on an ongoing basis. The contribution margin on each unit will be $2. The business requires an operating space equipment for mixing and cooking the pet food, and of course labour. Your friend has a choice of purchasing the equipm or leasing The lease would be $1000 per month and the equipment could be returned on one months notice. To purchase the equipment would require an imm mutlay of $19.000. The equipment would have a useful life of five years, and can produce 3,000 units per month. equired the space below, write your friend an advisory memo, explaining the concept of operating leverage, break even point margin of safety, and any other concepts yo ave learned in the course that may help him in his decision making about his business, BEE M lear my Consider this situation. A friend of yours has decided to start a small business. They have some money to invest, but do not have unlimited funds. The business will pecally pet food supplier catering to customers who are willing to pay a premium for anything related to their pets. The company expects to sell 500 units per mo or the first six months, then 1.000 units per month for six months, and then 2,000 on an ongoing basis. The contribution margin on each unit will be $2. The business requires an operating space equipment for mixing and cooking the pet food, and of course labour. Your friend has a choice of purchasing the equipm or leasing The lease would be $1000 per month and the equipment could be returned on one months notice. To purchase the equipment would require an imm mutlay of $19.000. The equipment would have a useful life of five years, and can produce 3,000 units per month. equired the space below, write your friend an advisory memo, explaining the concept of operating leverage, break even point margin of safety, and any other concepts yo ave learned in the course that may help him in his decision making about his business, BEE M
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