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Pierre's Hair Salon is considering opening a new location in French Lick, California. The cost of building a new salon is $265,300. A new salon will normally generate annual revenues of $64,815, with annual expenses (including depreciation) of $39,300. At the end of 15 years the salon will have a salvage value of $74,900.
Calculate the annual rate of return on the project.
Compute the break-even point in number of rooms rented. What percentage occupancy for theyear is needed to break even? Assume that the volume level of rooms sold is 150,000. The manager is wondering how much incomecould be generated by adding sales ..
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