Investment required $1,000,000

Operating Expenses and Revenue
Rent $310,600
utilities $38,644
labor $594,750

Revenue per cake $80
COGS per cake (=50% of Revenue)

Expected annual growth in rent 3%
Expected annual growth in utility costs 3%
Expected annual growth in labor costs 5%

A) How many cakes do you need to sell such
that you break even (i.e., revenues =
expense)?

B)At what rate cake sales would have to grow
in order to pay off capital costs within 5
years?

Answer rating: 100% (QA)

A To break even you need to cover all expenses with cake sales Lets calculate the total annual expen... View the full answer