Question: C. Problem Solving Questions (30' in total) 1. A new restaurant is ready to open for business. It is estimated that the food costs (variable

C. Problem Solving Questions (30' in total) 1. A new restaurant is ready to open for business. It is estimated that the food costs (variable cost) will be 30% of sales, while fixed costs will be $540,000. The first year's sales estimates are $1,500,000. The cost to start up this restaurant will be $2,000,000. Two financing alternatives are being considered: a) 50% equity financing and 50% debt at 9%, or b) all equity financing. Common stock can be sold at $5 per share. a) Compute the operating break-even point in dollars (excluding startup costs in year one).| b) Compute DOL at the end of the first projected year. c) Compute DFL and DCL for both financing plans at the end of the first projected yea

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