Question: 3. Chipotle, Inc. recently introduced a delivery service. Consequently, each restaurant has to buy two cars which cost $23,000 each, and can be depreciated in

3. Chipotle, Inc. recently introduced a delivery service. Consequently, each restaurant has to buy two cars which cost $23,000 each, and can be depreciated in straight line for 3 years with a salvage value of $5,000 (which can be realized in the fifth year and pays zero tax). The operation costs of the delivery service are $18,000 per year, and its variable cost is $1.50 per delivery. The average charge for each delivery is $3.00. Chipotle's tax rate is 21%, and it uses a 8% discount rate. How many meals does Chipotle need to deliver each day before break-even? (Compare the accounting approach number to the present value approach number) 3. Chipotle, Inc. recently introduced a delivery service. Consequently, each restaurant has to buy two cars which cost $23,000 each, and can be depreciated in straight line for 3 years with a salvage value of $5,000 (which can be realized in the fifth year and pays zero tax). The operation costs of the delivery service are $18,000 per year, and its variable cost is $1.50 per delivery. The average charge for each delivery is $3.00. Chipotle's tax rate is 21%, and it uses a 8% discount rate. How many meals does Chipotle need to deliver each day before break-even? (Compare the accounting approach number to the present value approach number)
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
