P6.6 An owner invested $180,000 in a new family-style restaurant, of which

$160,000 was immediately used to purchase equipment and $20,000 was retained for working cash. Estimates for the first year of business are as follows:

Menu selling prices to be established to give a markup of 150 percent over cost of food sold Variable wages, 28 percent of revenue Fixed wages, $51,600 Other variable costs, 7 percent of revenue Rent, $36,000 Insurance, $4,800 Depreciation on equipment, 20 percent Return on investment desired, 12 percent Income tax rate, 30 percent