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Problem 3 (12 points total). Make-Your-Own Pizza Pie is a custom pizzeria in St. Louis, MO. The owner, Cosmo Kramer, has set the price of

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Problem 3 (12 points total). Make-Your-Own Pizza Pie is a custom pizzeria in St. Louis, MO. The owner, Cosmo Kramer, has set the price of a pizza at $16. The average cost of pizza ingredients is $6 per pizza and the average labor cost per pizza is $4. Kramer pays annual fixed cost (store rent) of $30,000. In 2023, Kramer sold 20,000 pizzas. A. Assuming Kramer pay a 20% tax on income, how much money was made by Make-Your-Own Pizza Pie in 2023 after taxes? ( 3 points) B. Assume that Kramer invests in a $10,000 advertising campaign in 2024 which is expected to increase pizza sales by 10%. If Kramer is in the 20% tax bracket, how much will he earn after taxes in 2024 ? (3 points) C. Assume the original facts in Problem 1. Kramer has been notified by his supplier that, due to a supply chain difficulties, the price of pizza ingredients will increase by 15% in 2024 . Further, his landlord has advised him that due to inflation the annual rent is going up by $5,000. If Kramer expects to sells 20,000 pizzas and wants to make $100,000 after taxes (at a 20% rate), what price must he charge for a pizza in 2024? (3 points) D. Assume the original facts in Problem 1. On January 1,2024, Kramer invests in $50,000 in a kioskbased pizza ordering system that will cut labor costs per pizza from $4 to $2. The kiosk-based system will require annual on-going maintenance and software support of $2,000. Further, assume the kiosk system will last five years and that straight-line depreciation is used to allocate the cost of the order system over its useful life. Required: (a) Please calculate net income before tax assuming the investment in the kiosk system is made, and (b) identify the change in annual income if Kramer invests in the kiosk-based ordering system. (3 points)

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