Question

An entrepreneur recently purchased Cocoon's, a local deli, on the beach. To operate the business, she estimates that selling and administrative expenses will be $94,090.00 per year and that depreciation will be $20,000.00 per year. As part of her purchase, she took out a bank loan that will require $81,790.00 per year in interest. She anticipates paying a 28.00% tax rate on income.

She estimates that the deli will attract 200.00 customers per day. Each customer will spend $12.00 on average. The cost of goods per customer will be $4.50. She will operate the deli 350.00 days per year.

What is the projected gross profit margin for the deli?

What is the projected operating profit margin for the deli?

What is the projected net profit margin for the deli?

Answer format: Percentage Round to: 2 decimal places (Example: 9.24%, % sign required. Will accept decimal format rounded to 4 decimal places (ex: 0.0924)

Answer 1

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