Kara Ring Owns a Successful Flower Shower Called Always Blooming

question 12

Essay

Kara Ring owns a successful flower shower called Always Blooming. Kara wants to expand the shop by leasing the space next door for $1,200 per month, and adding refrigerators to keep the flowers fresh and two checkout counters so the customers do not have to wait in long lines. She currently pays $1,000 per month for her current store space and has two refrigerators that cost her $6,000 each two years ago. She figures that the new refrigerators and counters will cost $25,000. She also has determined that the current cash register that initially cost her $1,000 two years ago and has been depreciated $250 each year would have to be replaced with two new cash registers costing $1,500 each. She thinks sales would increase by $10,000 per month. Variable costs are 40% of sales.
Required:

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Definitions:

Refractory Threshold

The minimum duration needed after an action potential initiation during which another action potential cannot be triggered in a neuron.

Absolute Threshold

The minimum intensity of a stimulus that one can detect 50% of the time, marking the boundary between perceivable and imperceptible stimulus intensity.

Difference Threshold

The minimum difference in stimulation that a person can detect 50% of the time; also known as the just noticeable difference (JND).

Relative Magnitude

The perceived size or importance of one quantity in comparison to another.