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Thinking of opening a small copy shop

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You are thinking of opening a small copy shop. It costs $8000 to rent a copier for a year and costs $0.023per copy to operate the copier. Other fixed costs ofrunningthe store will amount to $600 per month. Youplan to charge an average of $0.12 per copy, and thestore will be open 365 days per year. Each copier canmake up to 150,000 copies per year.

a) Using Excel, construct a two-way profit table( number of copiers on the left running top to bottom and daily demand on the top running from left to right for the 1 to 5 copiers rented and daily demands of 1000, 1500, 2000 and 2500 copies per day. That is, compute annual profit for each of these combinations of copiers rented and daily demand.

b) Given that you rent three copiers, what daily demand for copies will allow you to break even? Draw a break- even graph to show thi break-even relationship.

Reference no: EM131213845

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