Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

You are thinking of opening a Coffee shop. It costs $ 6 , 0 0 0 to rent a Coffee Maker for a year. It

You are thinking of opening a Coffee shop. It costs $6,000 to rent a Coffee Maker for a year. It costs $0.79 per cup of coffee to operate the coffee maker. Other fixed costs of running the store amount to $9,000 per month ($108,000.00 per year). You charge an average of $3.49 per coffee. You are open 360 days per year. Each coffee maker can make up to 30,000 coffees per year.
Using Excel, construct a two-way profit table (number of coffee makers on the left running top to bottom and daily demand on the top running from left to right) for 1 to 5 coffee makers rented and daily demands of 200,250,300, and 350 coffees per day. Calculate annual profit for each of these combinations of Coffee makers rented and daily demand.
If you rent three coffee makers, what daily demand for coffees will allow you to break even? Draw a break-even graph to show this break-even relationship

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

Financial Modeling An Introductory Guide To Excel And VBA Applications In Finance

Authors: Joachim Häcker, Dietmar Ernst

1st Edition

1137426578, 978-1137426574

More Books

Students also viewed these Finance questions