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Question: You are planning to open a coffee shop. Your financial projections for the first year of operations are as follows: Revenues (15,000 cups) - $75,000 Wages & Benefits - $35,000 Rent $12,000 - Depreciation - $5,000 Utilities - $3,000 Coffee Beans - $15,000 Other Supplies - $5,000 Assume that all costs are fixed, except for coffee beans and other supplies, which are variable. The coffee shop must pay taxes at a 25% rate. How many cups of coffee must be sold to provide you with an after-tax profit of $20,000?

Question: You are planning to open a coffee shop. Your financial projections for the first year of operations are as follows: Revenues (15,000 cups) - $75,000 Wages & Benefits - $35,000 Rent $12,000 - Depreciation - $5,000 Utilities - $3,000 Coffee Beans - $15,000 Other Supplies - $5,000 Assume that all costs are fixed, except for coffee beans and other supplies, which are variable. The coffee shop must pay taxes at a 25% rate. How many cups of coffee must be sold to provide you with an after-tax profit of $20,000?

FINANCIAL ACCOUNTING
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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Question: You are planning to open a coffee shop. Your financial projections for the first year of operations are as follows: Revenues (15,000 cups) - $75,000 Wages & Benefits - $35,000 Rent $12,000 - Depreciation - $5,000 Utilities - $3,000 Coffee Beans - $15,000 Other Supplies - $5,000 Assume that all costs are fixed, except for coffee beans and other supplies, which are variable. The coffee shop must pay taxes at a 25% rate. How many cups of coffee must be sold to provide you with an after-tax profit of $20,000?
Transcribed Image Text:Question: You are planning to open a coffee shop. Your financial projections for the first year of operations are as follows: Revenues (15,000 cups) - $75,000 Wages & Benefits - $35,000 Rent $12,000 - Depreciation - $5,000 Utilities - $3,000 Coffee Beans - $15,000 Other Supplies - $5,000 Assume that all costs are fixed, except for coffee beans and other supplies, which are variable. The coffee shop must pay taxes at a 25% rate. How many cups of coffee must be sold to provide you with an after-tax profit of $20,000?
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