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SCENARIO 9.1: Amy borrowed $20,000 from her parents to open a bagel shop. She pays her parents a 5% yearly return on the money they lent her. Her other yearly fixed costs equal $9,000. Her variable costs equal $30,000. In her first year, Amy sold 40,000 dozen at a price of $1.50 per dozen. Refer to Scenario 9.1. Amys total costs equalGroup of answer choices$39,000.$40,000.$50,000.$59,000.

Question

SCENARIO 9.1: Amy borrowed 20,000fromherparentstoopenabagelshop.Shepaysherparentsa520,000 from her parents to open a bagel shop. She pays her parents a 5% yearly return on the money they lent her. Her other yearly fixed costs equal 9,000. Her variable costs equal 30,000.Inherfirstyear,Amysold40,000dozenatapriceof30,000. In her first year, Amy sold 40,000 dozen at a price of 1.50 per dozen. Refer to Scenario 9.1. Amys total costs equalGroup of answer choices39,000.39,000.40,000.50,000.50,000.59,000.

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Solution

To calculate Amy's total costs, we need to add her fixed costs, variable costs, and the interest she pays to her parents.

First, let's calculate the interest she pays to her parents. She borrowed 20,000andpaysa520,000 and pays a 5% yearly return. So, the interest is 20,000 * 5/100 = $1,000.

Her fixed costs are 9,000andhervariablecostsare9,000 and her variable costs are 30,000.

So, her total costs are 1,000(interest)+1,000 (interest) + 9,000 (fixed costs) + 30,000(variablecosts)=30,000 (variable costs) = 40,000.

Therefore, Amy's total costs equal $40,000.

This problem has been solved

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