Problem:
Utah is a popular resort and is being developed as a hot new spring break destination. Unfortunately, Utah regularly faces shortages of fresh water. Ann has the entrepreneurial spirit and plans to open a business shipping barges to the town. Ann's accountant estimated fixed cost fo the project to be 2,500,000 and variable cost to be $50,000 per barge load. selling is expected to average $75,000 per barge load.
Required:
Question 1) What is her brake-even point in units?
Question 2) What is her break even point in dollars?
Question 3) If she anticipates demand for 20 barges during the next year, should she enter this Business? Solve the given numerical problem and illustrate step by step calculation