question 1 and 2

Question 1 (20 points). Mr. ABC is planning to establish a chain of restaurants. It estimates that each new restaurant will cost approximately $750,000 The restaurant will hold 440 people and will have 4 shifts each day with average spending at $8 per customer. The variable costs in labor and material are estimated to be S6 per customer, they will be open 284 days each year. a. What must average occupancy (rate) be to break-even at the first year? (10 points) b. What is the gross profit if the restaurant has 625,000 customers this year? (05 points) c. If average spending $7.5 per customer, what is break-even Q now? (05 points) 1 3 Question 2 (30 points). T XYZ Company has gathered the following data for the past 4 years from its sales records. Year 2 4 Sales (*0008) 22 33 44 27 Adv. (*0005) 1 4 3 6 a. Develop a linear trend line forecast to predict the sales the company can expect in year 5. (05 points) b. The company has been tracking the relationship between sales and advertising dollars. Use linear regression to find out what sales might be if the company invested $13,710 in advertising next year (05 points) c. Compute those mean absolute deviations (MAD) in (a) and (b) (10 points) d. Which forecasting model should the company use? Explain (10 points) Page 1 of 3