Investment required $1,000,000 Operating Expenses and Revenue Rent $310,600 utilities $38,644 labor $594,750 Revenue per cake $80
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Question:
Investment required $1,000,000
Operating Expenses and Revenue
Rent $310,600
utilities $38,644
labor $594,750
Revenue per cake $80
COGS per cake (=50% of Revenue)
Expected annual growth in rent 3%
Expected annual growth in utility costs 3%
Expected annual growth in labor costs 5%
A) How many cakes do you need to sell such
that you break even (i.e., revenues =
expense)?
B)At what rate cake sales would have to grow
in order to pay off capital costs within 5
years?
Related Book For
Accounting
ISBN: 978-0324662962
23rd Edition
Authors: Jonathan E. Duchac, James M. Reeve, Carl S. Warren
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