### Start a Lemonade Stand: Understanding Costs and ROIYour child wants to start a lemonade stand. Below are the estimated costs for the ingredients and materials needed:- **$3 for 3 pounds of sugar** (each pound can make half a gallon of lemonade)- **$9 for 3 dozen lemons** (6 lemons are required per gallon of lemonade)- **$4 for a dozen oranges** (2 oranges are needed per gallon of lemonade)- **$3 for a 100-count of plastic cups**- You plan to sell **6 gallons of lemonade**, assuming you will sell **100 cups** priced at **$0.50 each**.### Questions:1. **What is the ROI (Return on Investment) (write as a percentage)?** - Calculate the total costs. - Calculate the total revenue. - Use the formula: \[ \text{ROI} = \left( \frac{\text{Total Revenue} - \text{Total Cost}}{\text{Total Cost}} \right) \times 100 \]2. **Is it a good idea (Yes or No, based on ROI)?** - Evaluate whether the ROI is positive or negative.### Calculations:1. **Total Cost:** - **Sugar:** $3 - **Lemons:** $9 - **Oranges:** $4 - **Cups:** $3 \[ \text{Total Cost} = $3 + $9 + $4 + $3 = $19 \]2. **Total Revenue:** - **100 cups at $0.50 each:** \[ \text{Total Revenue} = 100 \times 0.50 = $50 \]3. **ROI Calculation:** \[ \text{ROI} = \left( \frac{50 - 19}{19} \right) \times 100 = \left( \frac{31}{19} \right) \times 100 \approx 163\% \]### Conclusion:Based on the ROI calculation, this appears to be a good idea as the ROI is significantly positive. \[ \text{Is it a good idea?} \quad \text{Yes} \]

The question is based on the concept of Cost Accounting.

Your child wants to start a lemonade stand. The ingredients would cost: S3 for 3 pounds of sugar (half a pound per gallon) $9 for 3 dozen lemons (6 lemons per gallon) $4 for a dozen oranges (2 oranges per gallon) S3 for 100-count of plastic cups 6 gallons of lemonade will be sold (use 100 cups sold @ S0.50 each) 1. What is the ROI (write as a percentage)? 2. Is it a good idea (Yes or No, based on ROI)?

Your child wants to start a lemonade stand. The ingredients would cost: S3 for 3 pounds of sugar (half a pound per gallon) $9 for 3 dozen lemons (6 lemons per gallon) $4 for a dozen oranges (2 oranges per gallon) S3 for 100-count of plastic cups 6 gallons of lemonade will be sold (use 100 cups sold @ S0.50 each) 1. What is the ROI (write as a percentage)? 2. Is it a good idea (Yes or No, based on ROI)?

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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