Your engineering friend has decided to quit his $150,000 a year job and has $500,000 in funds.
Question:
Your engineering friend has decided to quit his $150,000 a year job and has $500,000 in funds. He wants to explore opening a Taproom serving local micro-brews in a strip mall location and believes that the Taproom equipment could be resold for $70,000 if he abandons the venture.. The initial build-out of store is $70,000 of equipment only and the landlord will make all other improvements. The owner believes that the selling price per unit is $15 and the variable costs will average $5. If the annual fixed costs are $80,000, then how many beers are need to break-even for the Taproom and provide just the same wage assuming a 360 day year?
a) 83 beers per day (rounded)
b) 64 beers per day (rounded)
c) 42 beers per day (rounded)
d) None of the above.
Entrepreneurship Successfully Launching New Ventures
ISBN: 978-0133797190
5th edition
Authors: Bruce R. Barringer, R. Duane Ireland