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 $440,000 per year while the average variable cost per meal is estimated at $15.00. These meals would be sold for an average of $27.00 each.
Question 15. Perform a break-even analysis of your proposed business.
Question 22 . How many units will you have to sell each year to breakeven?
Question 31 pts How many units will you have to sell each evening (use a 365-day year) to breakeven?
Question 42 pts How much profit will the restaurant earn on sales of 40,000 meals?
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