Jared Is Looking to Expand His Lawn-Mowing Business and Wants

Essay

Jared is looking to expand his lawn-mowing business and wants to evaluate the profitability of a potential new market. The area he is looking at has 400 homes and Jared estimates that 10 percent of them would be likely to use his service. He charges $25 per mowing and on average customers mow their lawns 20 times a year. Jared estimates the variable costs to expand his business will be $5 per mowing and his fixed costs are $2,000. How much profit would Jared make on this new segment?