Gloria is planning on opening a cake shop. Shehas found a location that rents for $15,550 peryear and it will cost her another $13,716 tofurnish the shop and purchase all thenecessary equipment. She plans on charging$20 for a cake and it will cost her $3 per cakefor ingredients and $1.92 per cake fordecorations and $1.59 per cake for thebeautiful, colorful to-go boxes. What is thedollar breakeven point she will need to earn tocover her costs in the first year? Round to thenearest whole number.

Breakeven point is the point when the there is no profit or loss. This is when the contribution…

Answered: Gloria is planning on opening a cake…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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A new homeowner, Ms. Dee Young, needs to decide whether to install R-11 or R-19 insulation in the attic of her new home. The insulated area is 1,550 square feet. The upgrade from R-11 to R-19 insulation costs $0.05 per square foot. The upgraded insulation is expected to save Ms. Dee Young approximately 440 kilowatt hours of energy usage per year. The planning horizon is 22 years and electricity costs $0.10/kWh. MARR is 11% per year. Based on a future worth analysis, is the upgrade to R-19 insulation economically justified? The future worth of R-19 insulation is $ ? Carry all interim calculations to 5 decimal places and then round your final answer to 2 decimal places. The tolerance is +0.15.
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