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Your business plan for your proposed start-up firm envisions first-year revenues of $150,000, fixed costs of $50,000, and variable costs equal to 30% of revenue.
Your business plan for your proposed start-up firm envisions first-year revenues of $150,000, fixed costs of $50,000, and variable costs equal to 30% of revenue.
Suppose that there is a new technology available in the market which can reduce the variable cost to 15% of revenue if implemented with a one-time cost. If you would like to break even when sales declines by 40%, what would be the max amount you are willing to pay for the new technology?
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