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Vesna [10]
3 years ago
12

You run a nail salon. Fixed monthly cost is $5,518.00 for rent and utilities, $6,014.00 is spent in salaries and $1,613.00 in in

surance. Also every customer requires approximately $4.00 in supplies. You charge $120.00 on average for each service. You are considering moving the salon to an upscale neighborhood where the rent and utilities will increase to $11,401.00, salaries to $6,716.00 and insurance to $2,203.00 per month. Cost of supplies will increase to $7.00 per service. However you can now charge $150.00 per service. At what point will you be indifferent between your current location and the new loaction?
Business
1 answer:
Liono4ka [1.6K]3 years ago
8 0

Answer:

With 266 costumers it is indifferent where the nail salon is located.

Explanation:

Giving the following information:

Fixed monthly cost is $5,518.00 for rent and utilities

$6,014.00 is spent on salaries.

$1,613.00 in insurance.

Every customer requires approximately $4.00 in supplies.

You charge $120.00.

New location:

Fixed costs in rent and utilities= $11,401

Salaries= $6,716.00

Insurance to $2,203.00 per month.

The cost of supplies will increase to $7.00 per service.

Selling price= $150.00 per service.

Gross profit old location= Contribution margin*Q - fixed costs

Gross profit old location= (120-4)*Q - 13145

Gross profit new location=Contribution margin*Q - fixed costs

Gross profit new location= (150-7)*Q - 20320

116*Q-13145= 143*Q - 20320

7175=27*Q

Q=265.74074 = 266costumers

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Answer:

the annual after-tax cost of financing the purchase of the home is $23,638.40

Explanation:

The computation of the annual after-tax cost of financing the purchase of the home is shown below:

= Installment amount - tax saving

= $33,200 - ($29,880 × 32%)

= $33,200 - $9,561.60

= $23,638.4

hence, the annual after-tax cost of financing the purchase of the home is $23,638.40

We simply applied the above formula

6 0
3 years ago
What is wrong with Brainly? People (or maybe even bots) keep posting a link to download a file to get the description/answer. I
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Answer:

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7 0
3 years ago
Read 2 more answers
Toy Town is considering a new toy that will cost $49,100 in startup costs. The toy is expected to produce cash flows of $47,500
Tasya [4]

Answer:

NPV with a 14.9% discount rate: 6,329.06

The toy should be produced as the NPV is positive.

IRR = 26.65%

Explanation:

First we calculate for the NPV using the given discount rate of 14.9%

We will calculate the present value of each year cash inflow:

\frac{inflow}{(1 + rate)^{time} } = PV  

Year 1 cash inflow: 47,500.00

time   1.00

rate  0.149

\frac{47500}{(1 + 0.149)^{1} } = PV  

PV   41,340.30

Year 2 cash inflow:  18,600.00

time   2.00

rate  0.149

\frac{18600}{(1 + 0.149)^{2} } = PV  

PV   14,088.76

Then, we add them and subtract the investment to get NPV

NPV = 14,088.76 + 41,340.3 - 49,100 = 6,329.06

The toy should be produced as the NPV is positive.

Now for the IRR

That is the rate at which NPV equals zero we can solve for this using the quadratic equation as there are only two cash flow:

Year 1 will discount at (1+IRR)

Year 2 will be discount at (1+IRR )^2

So we can express and recreate the quadratic formula:

18,600 X^2 + 47,500 X - 49,500 = 0

A = 18,600

B = 47,500

C = -49,100

x_1 = \frac{-b+\sqrt{b^{2} -4ac}}{2a}\\x_2 = \frac{-b -\sqrt{b^{2} -4ac}}{2a}

We can solve and get:

x1 =  0.78957

x2 = -3.3433

We take the positive value.

and now solve for IRR

\frac{1}{1+ IRR} = 0.78957\\IRR = \frac{1}{0.78957} -1

IRR = 0,2665121 = 26.65%

This will be the IRR for the project.

4 0
3 years ago
Which of the following statements is CORRECT? If Disney issues additional shares of common stock through an investment banker, t
nata0808 [166]

Answer:

The answer is: As they are generally defined, money market transactions involve debt securities with maturities of less than one year.

Explanation:

Money market transactions involve financial instruments with high liquidity and short-term maturities. Usually the securities have a one year or less maturity date.

A few examples of commonly traded securities are:

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8 0
3 years ago
1. Clean Machines Company (Clean) makes washing machines. Over the phone, Clean offers to sell Dealers Appliance Outlet (Dealers
photoshop1234 [79]

Answer:

Explanation:

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