- Happiness Company Wants To Open A New Spa In A Nearby Plaza Happiness Company Will Be Offering Half Day Spa Treatments 1 (166.26 KiB) Viewed 13 times
- Happiness Company Wants To Open A New Spa In A Nearby Plaza Happiness Company Will Be Offering Half Day Spa Treatments 2 (113.87 KiB) Viewed 13 times
Happiness Company wants to open a new spa in a nearby plaza. Happiness Company will be offering half-day spa treatments for $170 each. Variable costs (not including the leasing costs below) are $57 for every treatment. In terms of lease payments, the plaza has provided him three options: i. Pay $35 per treatment given ii. $18,000 per month iii. $16,000 per month and $15 per treatment given Do not enter dollar signs or commas in the input boxes. Use the negative sign for negative values. Round all answers to the nearest whole number. a) Calculate the monthly operating profit for each of the three options if 260 treatments are given and if 610 treatments are given. Lease Option i. Pay $35 per treatment given ii. $18,000 per month iii. $16,000 per month and $15 per treatment given Operating Profit Based on the Number of Treatments Given 260 units 610 units $ 20280 $ 11380 9480 47580 50930 43780 4
b) At a level of 610 massages, which option should be recommended? Option: ii c) Calculate the degree of operating leverage for the second lease option if Happiness Company gives 610 treatments. Round your answer to 2 decimal places. Degree of Operating Leverage: