Hopes to open a rustproofing shop

Assignment Help Finance Basics

Reference no: EM13820040

A retired auto mechanic hopes to open a rustproofing shop. Customers would be local new-car dealers. Two locations are being considered, one in the center of the city and one on the outskirts. The central city location would involve fixed monthly costs of $6,890 and labor, materials, and transportation costs of $30 per car. The outside location would have fixed monthly costs of $4,300 and labor, materials, and transportation costs of $40 per car. Dealer price at either location will be $90 per car.

a. Which location will yield the greatest profit if monthly demand is (1) 200 cars? (2) 300 cars?

200 cars: CityOutside yields the greatest profit.

300 cars: OutsideCity yields the greatest profit.

b. At what volume of output will the two sites yield the same monthly profit?

Reference no: EM13820040

Questions Cloud

Question regarding the basic time value of money : It is a common fact that many lottery winners are "broke" sooner than later. If you won a $1,000,000 lottery, would you want to collect the lump sum winnings today or receive the monies over time?

Review regarding falls in construction : You have had the opportunity to review research topics regarding falls in construction, select one, and briefly reflect on the topic.

Internet about the topic global environmental issues : Do some searching on the internet about the topic Global Environmental Issues. Find one good article on the topic , read it and submit a 1,5 page written summary of main ideas in the article. Include the article itself or a link to the article so ..

How is the organization a potential resource to you : Pick one that you think is most relevant to your career goals and tell me why. How is the organization a potential resource to you?

Hopes to open a rustproofing shop : A retired auto mechanic hopes to open a rustproofing shop. Customers would be local new-car dealers. Two locations are being considered, one in the center of the city and one on the outskirts. The central city location would involve fixed monthly ..

Calculate the estimated effect of misstatement on net income : Develop the expected amounts for 20X4 for each of the income statement items (based on what she believes in 1-6 above). Uden's unaudited financial statements for the current year show a 31 percent gross profit rate. Assuming that this represents a mi..

What would be the mechanics of a cave-in : Describe key elements with this process and the safety significance of the professional engineering - What would be the mechanics of a cave-in? What action would be necessary to prevent a cave-in?

What can you tell about the poets attitude towards war : How does Owen present his ideas about the consequences of war and comradeship? What can you tell about the poet's attitude towards war?

Impact of globalization on international financial : Imagine that you are a senior business manager for a U.S.-based multinational company. You have been informed by your supervisor that your Company needs to consider expanding into a new international market to seek new opportunities.To get started..

User Account

All Pages