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An entrepreneur who is planning to set up a restaurant estimates that the monthly costs of running the restaurant will be given by the formula C = 15000 + 2000n + 5m, where C is in dollars, n is the number of employees at the restaurant and m is the number of orders received in the month. He plans to start the restaurant with only 2 employees and to hire 1 new employee each month. He estimates that the average order value at his restaurant will be $50 and that the number of orders per month will increase by 10% month on month. If the estimated number of orders the restaurant receives in the first month of its existence is 1000, then as per this model, after how many months of operation will the restaurant first achieve a profit margin of 20% or more?
- a)1
- b)2
- c)3
- d)6
- e)Cannot be determined
Correct answer is option 'A'. Can you explain this answer?
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Verified Answer
An entrepreneur who is planning to set up a restaurant estimates that ...
Given:
- Monthly costs C = 15000 + 2000n + 5m, where
- n = number of employees
- m = number of orders
- Average order value = $50
- Month 1:
- n = 2
- m = 1000 (estimated)
- Month 2:
- n = 2 + 1 = 3
- m = 1.1*1000 (estimated)
- In general, for kth Month:
- n = 2 + (k – 1)
- m = (1.1) *1000
To Find: After how many months of operation is Profit ≥ 20%
Approach:
- We’re given the month-on-month growth trend for both n and m. So, we can find the value of n and m for all months of operation. We also know the Average order value and it is constant for all months of operation. So, starting from the 1 month, we’ll find the value of Monthly Profit % till we get to the month for which the Profit % is greater than or equal to 20%
Working out:
- Thus, we see that the profit for the 1 month itself is estimated, as per the given model, to be greater than 100%
- Therefore, we do not need to do the evaluations for any more months. The profit margin is (much) greater than 20% in Month 1 itself.
Looking at the answer choices, we see that the correct answer is Option A
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An entrepreneur who is planning to set up a restaurant estimates that the monthly costs of running the restaurant will be given by the formula C = 15000 + 2000n + 5m, where C is in dollars, n is the number of employees at the restaurant and m is the number of orders received in the month. He plans to start the restaurant with only 2 employees and to hire 1 new employee each month. He estimates that the average order value at his restaurant will be $50 and that the number of orders per month will increase by 10% month on month. If the estimated number of orders the restaurant receives in the first month of its existence is 1000, then as per this model, after how many months of operation will the restaurant first achieve a profit margin of 20% or more?a)1b)2c)3d)6e)Cannot be determinedCorrect answer is option 'A'. Can you explain this answer?
Question Description
An entrepreneur who is planning to set up a restaurant estimates that the monthly costs of running the restaurant will be given by the formula C = 15000 + 2000n + 5m, where C is in dollars, n is the number of employees at the restaurant and m is the number of orders received in the month. He plans to start the restaurant with only 2 employees and to hire 1 new employee each month. He estimates that the average order value at his restaurant will be $50 and that the number of orders per month will increase by 10% month on month. If the estimated number of orders the restaurant receives in the first month of its existence is 1000, then as per this model, after how many months of operation will the restaurant first achieve a profit margin of 20% or more?a)1b)2c)3d)6e)Cannot be determinedCorrect answer is option 'A'. Can you explain this answer? for GMAT 2024 is part of GMAT preparation. The Question and answers have been prepared according to the GMAT exam syllabus. Information about An entrepreneur who is planning to set up a restaurant estimates that the monthly costs of running the restaurant will be given by the formula C = 15000 + 2000n + 5m, where C is in dollars, n is the number of employees at the restaurant and m is the number of orders received in the month. He plans to start the restaurant with only 2 employees and to hire 1 new employee each month. He estimates that the average order value at his restaurant will be $50 and that the number of orders per month will increase by 10% month on month. If the estimated number of orders the restaurant receives in the first month of its existence is 1000, then as per this model, after how many months of operation will the restaurant first achieve a profit margin of 20% or more?a)1b)2c)3d)6e)Cannot be determinedCorrect answer is option 'A'. Can you explain this answer? covers all topics & solutions for GMAT 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for An entrepreneur who is planning to set up a restaurant estimates that the monthly costs of running the restaurant will be given by the formula C = 15000 + 2000n + 5m, where C is in dollars, n is the number of employees at the restaurant and m is the number of orders received in the month. He plans to start the restaurant with only 2 employees and to hire 1 new employee each month. He estimates that the average order value at his restaurant will be $50 and that the number of orders per month will increase by 10% month on month. If the estimated number of orders the restaurant receives in the first month of its existence is 1000, then as per this model, after how many months of operation will the restaurant first achieve a profit margin of 20% or more?a)1b)2c)3d)6e)Cannot be determinedCorrect answer is option 'A'. Can you explain this answer?.
An entrepreneur who is planning to set up a restaurant estimates that the monthly costs of running the restaurant will be given by the formula C = 15000 + 2000n + 5m, where C is in dollars, n is the number of employees at the restaurant and m is the number of orders received in the month. He plans to start the restaurant with only 2 employees and to hire 1 new employee each month. He estimates that the average order value at his restaurant will be $50 and that the number of orders per month will increase by 10% month on month. If the estimated number of orders the restaurant receives in the first month of its existence is 1000, then as per this model, after how many months of operation will the restaurant first achieve a profit margin of 20% or more?a)1b)2c)3d)6e)Cannot be determinedCorrect answer is option 'A'. Can you explain this answer? for GMAT 2024 is part of GMAT preparation. The Question and answers have been prepared according to the GMAT exam syllabus. Information about An entrepreneur who is planning to set up a restaurant estimates that the monthly costs of running the restaurant will be given by the formula C = 15000 + 2000n + 5m, where C is in dollars, n is the number of employees at the restaurant and m is the number of orders received in the month. He plans to start the restaurant with only 2 employees and to hire 1 new employee each month. He estimates that the average order value at his restaurant will be $50 and that the number of orders per month will increase by 10% month on month. If the estimated number of orders the restaurant receives in the first month of its existence is 1000, then as per this model, after how many months of operation will the restaurant first achieve a profit margin of 20% or more?a)1b)2c)3d)6e)Cannot be determinedCorrect answer is option 'A'. Can you explain this answer? covers all topics & solutions for GMAT 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for An entrepreneur who is planning to set up a restaurant estimates that the monthly costs of running the restaurant will be given by the formula C = 15000 + 2000n + 5m, where C is in dollars, n is the number of employees at the restaurant and m is the number of orders received in the month. He plans to start the restaurant with only 2 employees and to hire 1 new employee each month. He estimates that the average order value at his restaurant will be $50 and that the number of orders per month will increase by 10% month on month. If the estimated number of orders the restaurant receives in the first month of its existence is 1000, then as per this model, after how many months of operation will the restaurant first achieve a profit margin of 20% or more?a)1b)2c)3d)6e)Cannot be determinedCorrect answer is option 'A'. Can you explain this answer?.
Solutions for An entrepreneur who is planning to set up a restaurant estimates that the monthly costs of running the restaurant will be given by the formula C = 15000 + 2000n + 5m, where C is in dollars, n is the number of employees at the restaurant and m is the number of orders received in the month. He plans to start the restaurant with only 2 employees and to hire 1 new employee each month. He estimates that the average order value at his restaurant will be $50 and that the number of orders per month will increase by 10% month on month. If the estimated number of orders the restaurant receives in the first month of its existence is 1000, then as per this model, after how many months of operation will the restaurant first achieve a profit margin of 20% or more?a)1b)2c)3d)6e)Cannot be determinedCorrect answer is option 'A'. Can you explain this answer? in English & in Hindi are available as part of our courses for GMAT.
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An entrepreneur who is planning to set up a restaurant estimates that the monthly costs of running the restaurant will be given by the formula C = 15000 + 2000n + 5m, where C is in dollars, n is the number of employees at the restaurant and m is the number of orders received in the month. He plans to start the restaurant with only 2 employees and to hire 1 new employee each month. He estimates that the average order value at his restaurant will be $50 and that the number of orders per month will increase by 10% month on month. If the estimated number of orders the restaurant receives in the first month of its existence is 1000, then as per this model, after how many months of operation will the restaurant first achieve a profit margin of 20% or more?a)1b)2c)3d)6e)Cannot be determinedCorrect answer is option 'A'. Can you explain this answer?, a detailed solution for An entrepreneur who is planning to set up a restaurant estimates that the monthly costs of running the restaurant will be given by the formula C = 15000 + 2000n + 5m, where C is in dollars, n is the number of employees at the restaurant and m is the number of orders received in the month. He plans to start the restaurant with only 2 employees and to hire 1 new employee each month. He estimates that the average order value at his restaurant will be $50 and that the number of orders per month will increase by 10% month on month. If the estimated number of orders the restaurant receives in the first month of its existence is 1000, then as per this model, after how many months of operation will the restaurant first achieve a profit margin of 20% or more?a)1b)2c)3d)6e)Cannot be determinedCorrect answer is option 'A'. Can you explain this answer? has been provided alongside types of An entrepreneur who is planning to set up a restaurant estimates that the monthly costs of running the restaurant will be given by the formula C = 15000 + 2000n + 5m, where C is in dollars, n is the number of employees at the restaurant and m is the number of orders received in the month. He plans to start the restaurant with only 2 employees and to hire 1 new employee each month. He estimates that the average order value at his restaurant will be $50 and that the number of orders per month will increase by 10% month on month. If the estimated number of orders the restaurant receives in the first month of its existence is 1000, then as per this model, after how many months of operation will the restaurant first achieve a profit margin of 20% or more?a)1b)2c)3d)6e)Cannot be determinedCorrect answer is option 'A'. Can you explain this answer? theory, EduRev gives you an
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