Fiona Is Looking to Expand Her Pet Grooming Business and Wants

question 72

Multiple Choice

Fiona is looking to expand her pet grooming business and wants to evaluate the profitability of a potential new market.The area she is looking at has 2,000 homes and Fiona estimates that 20 percent of them would be likely to use her service.She charges $45 per grooming and on average customers groom their pets six times a year.Fiona estimates her variable costs to expand her business will be $10 per grooming and her fixed costs are $10 ,000.How much profit would Fiona make on this new segment?

• A) $72,240
• B) $98,000
• C) $108,000
• D) $128,000
• E) $410,000