Question

Raymond estimates that the fixed costs associated with opening a new bank branch are $500,000. he expects the branch to attract 1,000 new customer accounts in the first year, each of which will cost $50 per year to service. he also expects to generate $100,000 per year in revenue. for raymond, the total cost of opening the new branch and remaining open for one year will be

Answer 1

Raymond's assets:$500.000 in cash
Raymond's revenue: $100.000 per year (revenue is not need in calculation as it's the aftermath.)
1,000 customers * $50 per year

Raymond's assets

1.000 customers * $50 per year
= $50.000 + net: $500.000 = $550.000 (for opening new branch and remaining open for one year)

The is $550.000