Collin Wants to Expand His Lawn-Care Business and Wants to Evaluate

question 3

Essay

Collin wants to expand his lawn-care business and wants to evaluate the profitability of a potential new market. The area he is looking at has 400 homes and Collin estimates that 10 percent of them would be likely to use his service. He charges $25 per lawn and on average customers want their lawns taken care of 20 times a year. Collin estimates the variable costs to expand his business will be $5 per service call and his fixed costs are $2,000. How much profit would Collin make on this new segment?

Analyze decision-making processes in microeconomic contexts, including cost-benefit analyses for accepting contracts.

Distinguish between opportunity costs and incremental costs in business decisions.

Recognize the role of internal control systems and their components in an organization.

Understand the elements and importance of a firm's information system.

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Definitions:

Reading Skills

The abilities that enable an individual to read, understand, interpret, and critically assess written materials.

Reliability

The consistency and dependability of a measurement tool, assessment, or result over time.

Replication

The process of repeating a research study or experiment with the aim of verifying the findings or increasing the reliability of the results.

Anger-Related Words

Terms that are specifically associated with the emotion of anger or describe aspects of anger.