Calculating Loan Interest, Restaurant Profit, and Book Sales Royalties

Loan Interest Calculations

You are borrowing $350,000 to buy a condo and will be making payments at the end of each month. For an annual interest rate ranging from 1 percent through 10 percent and loan durations of 10, 15, 20, 25, and 30 years, determine the total interest paid on the loan.  You are thinking of opening a café that will have six four-person tables. Each day that the restaurant is open, there are two lunch sessions/periods and three dinner sessions/periods. The average lunch check is $20, and you earn a 40 percent profit margin on lunch checks. The average dinner check is $40, and you earn a 50 percent profit margin on dinner checks. Assume the fixed cost of running a restaurant is $400,000 per year. Assuming 364 (7×52) days in a year, use a data table to show how annual profit changes as percentage of seats filled at each meal varies between 10 percent and 100 percent. (Hint: One-way data table is sufficient.) What if the you assumed the restaurant was open 5 days a week, 52 weeks in the year? What if the you assumed the restaurant was open 6 days a week, 52 weeks in the year?You’ve been assigned to analyze the profitability of Barack Obama’s autobiography or “Barry” as he was called while attending Occidental College. The following assumptions have been made: Bill is receiving a one-time royalty payment of $12 million. The fixed cost of producing the hardcover version of the book is $1 million. The variable cost of producing each hardcover book is $4. The publisher’s net from book sales per hardcover unit sold is $15. The publisher expects to sell 1 million hardcover copies. The fixed cost of producing the paperback is $100,000. The variable cost of producing each paperback book is $1. The publisher’s net from book sales per paperback unit sold is $4. Paperback sales will be double hardcover sales. Use this information to answer the following questions: Determine how the publisher’s before-tax profit will vary as hardcover sales vary from 100,000 through 1 million copies. Describe the results. Determine how the publisher’s before-tax profit varies as hardcover sales vary from 100,000 through 1 million copies and the ratio of paperback to hardcover sales varies from 1 through 2.4. Describe the results.