Essay
Sherrell Washington owns a successful hole-in-the-wall bagel shop called Big Apple Bagels. Sherrell wants to expand the shop by leasing the space next door for $500 per month, and adding tables and chairs so that customers can dine in. She figures that the tables and chairs will cost $4,000 and that the bagel machine, that cost $3,500 five years ago, would have to be scrapped in favor of a larger machine costing $6,400. She thinks sales would increase by $4,000 per month. Variable costs are 50% of sales.
Correct Answer:

Verified
Correct Answer:
Verified
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