• Mar 22nd 2014, 02:10 PM
haywired2002
Q1. An enterprising college student has decided to purchase a local car wash business. The purchase cost is \$150,000. Car washes will be priced at \$5.50 and variable cost per car is expected to be \$1.5. How many cars must be washed in order to recover the \$150,000 purchase price?

Q2. A charitable organization is planning a raffle to raise \$10,000. Five hundered chances will be sold on new car. The car will cost the organization \$150,000. How much should each ticket cost if the organization wishes to net a profit of \$10,000.

Q3. A publisher has a fixed cost of \$250,000 associated with the production of college mathematics book. The contribution to profit and fixed cost from the sale of each book is \$6.25
(a) Determine the number of books which must be sold in order to break even
(b) What is the expected profit if \$50,000 books were sold?
• Mar 22nd 2014, 02:39 PM
JeffM
Quote:

Originally Posted by haywired2002
Q1. An enterprising college student has decided to purchase a local car wash business. The purchase cost is \$150,000. Car washes will be priced at \$5.50 and variable cost per car is expected to be \$1.5. How many cars must be washed in order to recover the \$150,000 purchase price?

Q2. A charitable organization is planning a raffle to raise \$10,000. Five hundered chances will be sold on new car. The car will cost the organization \$150,000. How much should each ticket cost if the organization wishes to net a profit of \$10,000.

Q3. A publisher has a fixed cost of \$250,000 associated with the production of college mathematics book. The contribution to profit and fixed cost from the sale of each book is \$6.25
(a) Determine the number of books which must be sold in order to break even
(b) What is the expected profit if \$50,000 books were sold?

Let's deal with one problem at a time.

In question 1, if variable costs are \\$1.50 per wash and price per wash is \\$5.50, what is net cash received per wash?

So how many washes does it take to equal the purchase price of \\$150,000.