7 given a 25 profit margin and 975 per day in revenue

Info icon This preview shows pages 2–3. Sign up to view the full content.

View Full Document Right Arrow Icon
7. Given a 25% profit margin and $975 per day in revenue, how many days would it take for the new engraver to earn back the total cost of purchase, if the entire net profit were allocated to pay for the unit? Round your answer to the next full day. It would take 104 days to earn enough profit to cover the cost of the engraver. ($975*25% = $243.75 per day profit). $25,300/$243.75 = a rounded up 104 days). 8. What other factors should Charlie consider in order to make a good business decision? Another factor Charlie should consider is whether or not he has the staff
Image of page 2

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
available to keep both the old machine and the new machine running until the old one finally breaks and essentially doubling his income? 9. Should Charlie buy the new engraver? Why? Yes. Charlie should by the engraver. Although it is a high cost item, the profits are high as well. He stands to gain far more than he stands to lose by making the purchase. Actually, the only short term loss he would have would be the payments. Everything else about the machine is a plus. In a little more than 3 months he can have it paid off and be back in the profit mode, potentially at an even greater pace with todays’ technology. The old machine may work fine but it is 12 years old. I am sure there have been many positive improvements in the machine over last 12 years.
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern