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Please solve Sales dollars to achieve desired after-tax profit and Guests served to achieve desired after-tax profit! (Please post excel formulas) J. D. MoAllister is
Please solve Sales dollars to achieve desired after-tax profit and Guests served to achieve desired after-tax profit! (Please post excel formulas)
J. D. MoAllister is really happy. He has just succeeded in securing a $2,000,000 bank loan with a variable percentage interest rate to build his dream restaurant. J. D.'s loan is for 25 years, and it carries an interest rate that is set at 7 percent for the first year (this year]. Thus, his first year's monthly interest payments will be $14,136. An experienced restaurateur, J. D. has prepared the following annual budget for this year. J. D.'s interest rate will likely vary over the life of the loan because it is tied to the prime interest rate established by the Federal Reserve Board (part of the federal government). Assume the Fed increases interest rates next year by 0.5 percent, and thus J. D.'s interest rate moves to 7.5 percent. As a result, his new monthly loan repayment will be $14,780. Also assume that his total variable cost percentage and fixed costs lesoluding the increased loan repayment) will be the same nest year, and his check average (selling price) will be $20 per cover. With the higher mortgage payment, what sales dollars and number of guests served will J. D. need to achieve next year to maintain the same number of after-tan profit dollars as he budgeted for thisStep by Step Solution
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