Charles has decided to open a lawn-mowing company. To do so, he purchases mowing equipment for $5,000,
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Charles has decided to open a lawn-mowing company. To do so, he purchases mowing equipment for $5,000, buys gasoline ($2.30 in gas is required to mow each yard), and pays a helper $10.00 per yard. Prior to opening the lawn company, Charles earned $8,000 as a lifeguard at the neighborhood swimming pool. Assume the money he used to purchase the mowing equipment could otherwise have earned 2 percent per year in the bank and that the mowing equipment depreciates at 10 percent per year. Charles plans to mow 200 yards per year. What is Charles's implicit cost of production per year?
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Service Management Operations Strategy Information Technology
ISBN: 978-0077841201
8th edition
Authors: James Fitzsimmons, Mona Fitzsimmons, Sanjeev Bordoloi
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