Question

Jami is an accountant at a mid-sized firm and has been hired by an investor to make recommendations about fi

local small businesses. These businesses are all in debt, but the investor sees potential in each idea. The investor wom
to know when each company is projected to break even and would prefer companies that will turn a profit with
the next 24 months. The investor secured the expense and revenue reports of each of the businesses to review.
Jami has created linear models to project the Cost and Revenue of each business and now must use the results
finalize her findings. In each equation x represents months. What should her recommendation be? How do
businesses rank?
Cost
Revenue
Blysis
of the evidence
Evidence
Appster
Enrich
(Technology Start-up) (Education Program)
y-13124.3190x y-6941915384x
y-3586x
y-21954x
¡.
Green Team
(Alternate Energy)
y 178420 64421x
y-68419x
Southwest Fusion
(Restaurant)
y-4289115387x
y-13174x
ons and show work.
Zoo to You
(Children's Parties)
y54209539
y-10381x
Conclusion
or Recommendation
e Clark Creative Ex

Answer 1

To determine when each company is projected to break even, Jami needs to find the point where the Cost and Revenue equations intersect. This point will represent the month when the business is projected to break even, as the Cost and Revenue will be equal.

Using the given equations, we can set the Cost equation equal to the Revenue equation for each business:

Blysis: -13124.3190x + 3586 = -6941915384x + 21954

Solving for x, we get x = 0.00057 months.

Since this value is extremely small, we can assume that Blysis is already profitable.

Appster: -13124.3190x + 3586 = -6941915384x + 21954

Solving for x, we get x = 0.00057 months.

Since this value is extremely small, we can assume that Appster is already profitable.

Enrich: -3586x - 21954 = -6941915384x + 13174

Solving for x, we get x = 0.0035 months.

Since this value is also very small, we can assume that Enrich is already profitable.

Green Team: 178420.64421x - 68419 = -4289115387x + 13174

Solving for x, we get x = 0.0009 months.

Since this value is extremely small, we can assume that Green Team is already profitable.

Southwest Fusion: -13124.3190x + 4289115387x = 13174

Solving for x, we get x = 35.23 months.

This value indicates that Southwest Fusion is projected to break even in approximately 35 months.

Zoo to You: -13124.3190x + 54209539 = -10381x

Solving for x, we get x = 4.05 months.

This value indicates that Zoo to You is projected to break even in approximately 4 months.

Based on these projections, Jami should recommend Blysis, Appster, Enrich, and Green Team to the investor, as they are already profitable or expected to break even within the next 24 months. Southwest Fusion and Zoo to You may not be as attractive for investment, as they are projected to take longer to become profitable.

Explanation: