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Problem: A good friend of yours has always wanted to run their own business and is thinking of investing in a food truck. He has done some initial market research (surveys/sampling), and there seems to be demand in the area. He needs some help with the numbers. A new food truck with a kitchen and related equipment costs about $100,000. Other fixed costs include salaries, gas for the truck, and license fees and are estimated to be about $50,000 per year. He wants to offer traditional Mediterranean cuisine, which seems to be popular. Variable costs include food and beverages, estimated at $6 per platter (meat, rice, vegetable, and pita bread). Meals will be priced at $10. Calculate the break-even for his food truck business. After reviewing the break-even, what changes would you suggest? Is this a viable business opportunity worth pursuing?
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