Marta estimates that the fixed costs associated with opening her new hair salon are $100,000. She expects the salon to attract 500 new customers in the first year, each of which will cost $25 to service. Marta expects to generate $50,000 per year in revenue. For Marta, the total cost of opening her hair salon and staying in business for one year will be ...

a) 50,000

b) 87,500

c) 100,000

d) 112,500

e) 150,000

Question

Maggie Gonzalez

Business

14 October, 23:28

Marta estimates that the fixed costs associated with opening her new hair salon are $100,000. She expects the salon to attract 500 new customers in the first year, each of which will cost $25 to service. Marta expects to generate $50,000 per year in revenue. For Marta, the total cost of opening her hair salon and staying in business for one year will be ...

a) 50,000

b) 87,500

c) 100,000

d) 112,500

e) 150,000

+1

Answers (1)

Know the Answer?

Sydney Baird · Answer 1

The correct answer is D.

Explanation:

Giving the following information:

Marta estimates that the fixed costs associated with opening her new hair salon are $100,000. She expects the salon to attract 500 new customers in the first year, each of which will cost $25 to service.

Total cost = total fixed costs + total variable cost

Total cost = 100,000 + 25*500 = 112,500