ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN: 9780190931919
Author: NEWNAN
Publisher: Oxford University Press
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Larry is opening a new laundromat in the city
of St. John's. His rent is $1500 per month,
and he pays insurance of $1200 per year.
Before opening, he had to pay $15,000 to
renovate the space and buy appropriate
equipment. He hired 2 employees, and pays
them a salary of $40,000 per year. For every
6 items of clothing that he cleans, he pays
out approximately $15 in cleaning chemicals.
Additionally, the plastic covers he uses for
the clothes he cleans cost $0.50 each, and he
spends approximately $10 in additional
hydro costs for every 30 items he cleans.
What are Larry's total monthly fixed costs,
one-time fixed costs, and variable costs?
Assume that the clothes Larry cleans have an
average selling price of approximately $25.
What is Larry's breakeven for year 1 in units?
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Transcribed Image Text:Larry is opening a new laundromat in the city of St. John's. His rent is $1500 per month, and he pays insurance of $1200 per year. Before opening, he had to pay $15,000 to renovate the space and buy appropriate equipment. He hired 2 employees, and pays them a salary of $40,000 per year. For every 6 items of clothing that he cleans, he pays out approximately $15 in cleaning chemicals. Additionally, the plastic covers he uses for the clothes he cleans cost $0.50 each, and he spends approximately $10 in additional hydro costs for every 30 items he cleans. What are Larry's total monthly fixed costs, one-time fixed costs, and variable costs? Assume that the clothes Larry cleans have an average selling price of approximately $25. What is Larry's breakeven for year 1 in units?
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