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Molly's Cupcakes managementistrying to decide whetherto stay in business. They are currently losing money andwantto know how close they are to making a profit and whether they should investin advertising.
Molly's provided the following information: Revenue $34,000? Expense 37,100 Profit(loss) <$3,100>
Managementresponded with the following information:
Management wantsto know how close they are tomaking a profit. Compute the increase in revenue required for Molly'sto break even.
Management has the opportunity to investinmonthly advertising. This advertising is expected to increase sales volume by 25%. What is the most it should be willing to pay for this advertising?
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