Question
You just inherited a million dollars from your grandfather. You always had a talent for cooking and have long dreamed of opening an expensive gourmet
You just inherited a million dollars from your grandfather. You always had a talent for cooking and have long dreamed of opening an expensive gourmet restaurant. You are happy living near your school campus and would like to open a four-star restaurant across the street from school. Of course, the restaurant would have certain fixed costs. For example: management salaries, utilities, interest, license fees, and property taxes. The only variable costs would be the food, beverages, and preparation costs. The fixed costs are estimated at $230,000 per year while the average variable cost per meal is estimated at $10.00. These meals would be sold for an average of $15.00 each.
How many units will you have to sell each year to breakeven?
Select one:
a. 46,000 meals
b. 48,000 meals
c. 46,500 meals
d. 56,500 meals
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