Question
You run a school in Florida. Fixed monthly cost is $6000 for rent and utilities, $5000 is spent in salaries and $1000 in insurance. Also
You run a school in Florida. Fixed monthly cost is $6000 for rent and utilities, $5000 is spent in salaries and $1000 in insurance. Also every student adds up to $90 per month in stationary, food etc. You charge $700 per month from every student now. You are considering moving the school to another neighborhood where the rent and utilities will increase to $10000, salaries to $6000 and insurance to $2000 per month. Variable cost per student will increase up to $150 per month. However, you can charge $1000 per student. At what point will you be indifferent between your current mode of operation and the new option? Question options: 1) 30 2) 20 3) 25 4) 40
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