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Janice opened a franchise short of Krispy Kreme Doughnuts in her hometown. She has been working really hard but the business doesn't seems to have taken off like thought it would so she is considering closina up shop and trving something new.

Janice opened a franchise short of Krispy Kreme Doughnuts in her hometown. She has been working really hard but the business doesn't seems to have taken off like thought it would so she is considering closina up shop and trving something new.

Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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Janice opened a franchise short of Krispy Kreme Doughnuts in her hometown. She has been working really hard but the business doesn't seems to have taken off like thought it would so she is considering closing up shop and trying something new. She excepts to earn $5,000 over the next six months (when her lease runs out). The rent for the next six months is $6,000 and she committed to paying rent of $4,000 on her production machinery until the end of the year. If she decides to keep the shop open she will need to pay for baking supplies and labor, equaling another $4,000. Using what you know about shutdown points, should Janice stick it out until the end of the year? What is she expects to earn $20,000 over the next six months? What is she expects to earn $2,000?
Transcribed Image Text:Janice opened a franchise short of Krispy Kreme Doughnuts in her hometown. She has been working really hard but the business doesn't seems to have taken off like thought it would so she is considering closing up shop and trying something new. She excepts to earn $5,000 over the next six months (when her lease runs out). The rent for the next six months is $6,000 and she committed to paying rent of $4,000 on her production machinery until the end of the year. If she decides to keep the shop open she will need to pay for baking supplies and labor, equaling another $4,000. Using what you know about shutdown points, should Janice stick it out until the end of the year? What is she expects to earn $20,000 over the next six months? What is she expects to earn $2,000?
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