A word-processed managerial report and 1 Excel file(s) showing your work (Ctrl)\

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A word-processed managerial report and 1 Excel file(s) showing your work (Ctrl)" Simulation Kelly Woods has decided to bid on the fast-food concession rights at the football stadium of her alma mater. She feels sure that a bid of $30,000 will win the concession, which gives her the right to sell food at football games for the next 5 years. she received a loan of $30,000 from her aunt to make a bid. Kelly promises to pay her $7,700 at the end of each year for 5 years. Annual sales is estimated to follow triangular distribution with ($20,000; $50,000; $70,000). The certain percentage of annual sales will be used for operating cost, and the percentages can vary from year to year as follows. Unit VC% Probability 30% 40% 50% 0.2 0.5 0.3 Run simulation for 500 years. 1 What is the expected profit per year? 2 What is the expected profit per 5 years? a What is the chance that yearly profit falls below $15,000? If Kelly thinks she can stay afloat if the profit per year is above $15,000, would you recommend her to go ahead and bid for the right? s. Answer the above four questions assuming the annual sa assuming the annual sales follows a uniform distribution with ($20,000; $70,000)

Explanation / Answer

1.

2. For 5 years

Annual Sales                20,000                50,000                70,000 Total Revenue              140,000 Variable Cost 41%                57,400 Interest on Loan 8.94%                   2,681                60,081 Expected Profit 57%                79,919

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