Discuss about combination of copiers rented and daily demand

Reference no: EM131893293

Question: You are thinking of opening a copy shop. It costs $8000 to red a copier for a year. It costs $0.023 per copy to operate the copier. Other fixed costs of running the store amount to $600 per month. You charge an average of $0.12 per copy. You are open 365 days per year. Each copier can make up to 150,000 copies per year.

a. Using Excel, construct a two-way profit table (number of copiers on the left running top to bottom and daily demand on the top running from left to right) for 1 to 5 copiers rented and daily demands of 1000, 1500, 2000, and 2500 copies per day. That is, compute annual profit for each of these combinations of copiers rented and daily demand.

b. Given that you rent three copiers, what daily demand for copies will allow you to break even? Draw a break-even graph to show this break-even relationship.

Reference no: EM131893293

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