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Entrepreneur Project

Entrepreneur Project. For Mr. Lenaway’s Math 8 classes. LET’S START WITH BUSINESS BASICS. BEFORE ANY MONEY IS MADE, YOU HAVE TO PAY YOUR BILLS. All of the money coming in is called REVENUE . All of the money going out to pay bills and employees is called overhead or costs .

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Entrepreneur Project

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  1. Entrepreneur Project For Mr. Lenaway’s Math 8 classes

  2. LET’S START WITH BUSINESS BASICS. BEFORE ANY MONEY IS MADE, YOU HAVE TO PAY YOUR BILLS. All of the money coming in is called REVENUE . All of the money going out to pay bills and employees is called overhead or costs. The money you have left (REVENUEcosts) is profit. • HERE IS AN EXAMPLE OF THE INFORMATION YOU RECEIVED FROM ME: • Restaurant Start-up cost $500,000 $500,000 loan must be paid off in 15 years Monthly cost $4,000 Average customer spends $9.00 per order Average customer costs $3.00 per order Average number of customers per day is x

  3. HERE IS HOW TO DEVELOP YOUR SYSTEMS OF EQUATIONS: • Restaurant Start-up cost $500,000 $500,000 loan must be paid off in 15 years Monthly cost $4,000 Average customer spends $9.00 per order Average customer costs $3.00 per order Average number of customers per day is x • THE SYSTEM OF EQUATIONS YOU NEED TO FIGURE OUT IS FOR THE BREAK EVEN POINT or “HOW MANY CUSTOMERS DO YOU NEED TO PAY ALL OF YOUR BILLS?” Revenue Figure out Revenue. r = 9x This equation for revenue will be the same for all systems of equations.

  4. HERE IS HOW TO DEVELOP YOUR SYSTEMS OF EQUATIONS: • Restaurant Start-up cost $500,000 $500,000 loan must be paid off in 15 years Monthly cost $4,000 Average customer spends $9.00 per order Average customer costs $3.00 per order Average number of customers per day is x COSTS BEFORE 2. FIGURE COSTS BEFORE LOAN IS PAID OFF: Figure monthly payment of loan 15 years * 12 months/year = 180 total months 500,000 / 180 = 2777.78. Round up to nearest dollar -> $2778. Costs are $3 per customer plus normal monthly cost of $4000 plus loan payment of 2778 : c = 3x + 6778

  5. HERE IS HOW TO DEVELOP YOUR SYSTEMS OF EQUATIONS: • Restaurant Start-up cost $500,000 $500,000 loan must be paid off in 15 years Monthly cost $4,000 Average customer spends $9.00 per order Average customer costs $3.00 per order Average number of customers per day is x COSTS after 3. FIGURE COSTS AFTER LOAN IS PAID OFF: Costs are $3 per customer plus normal monthly cost of $4000 c = 3x + 4000

  6. HERE IS HOW TO DEVELOP YOUR SYSTEMS OF EQUATIONS: • Restaurant Start-up cost $500,000 $500,000 loan must be paid off in 15 years Monthly cost $4,000 Average customer spends $9.00 per order Average customer costs $3.00 per order • Average number of customers per day is x • THE SYSTEM OF EQUATIONS YOU NEED TO FIGURE OUT IS FOR THE BREAK EVEN POINT or “HOW MANY CUSTOMERS DO YOU NEED TO PAY ALL OF YOUR BILLS?” BEFORE LOAN IS PAID OFF: COST: c = 3x + 6778 REVENUE: r = 9x AFTER LOAN IS PAID OFF: COST: c = 3x + 4000 REVENUE: r = 9x UNDERSTANDING: Before 1 customer walks in the door, my business will cost me nearly $7K per month. UNDERSTANDING: Before 1 customer walks in the door, my business will cost me nearly $4K per month.

  7. NEXT STEP: GRAPH USING ONLINE GRAPHING CALCULATOR. • ***I PREFER http://my.hrw.com/math06_07/nsmedia/tools/Graph_Calculator/graphCalc.html*** BEFORE LOAN IS PAID OFF: COST: c = 3x + 6778 REVENUE: r = 9x AFTER LOAN IS PAID OFF: COST: c = 3x + 4000 REVENUE: r = 9x 1. ENTER YOUR 3 DIFFERENT EQUATIONS

  8. NEXT STEP: GRAPH USING ONLINE GRAPHING CALCULATOR. • ***I PREFER http://my.hrw.com/math06_07/nsmedia/tools/Graph_Calculator/graphCalc.html*** BEFORE LOAN IS PAID OFF: COST: c = 3x + 6778 REVENUE: r = 9x AFTER LOAN IS PAID OFF: COST: c = 3x + 4000 REVENUE: r = 9x 2. You can’t have negative customers or negative revenue, so the “min” should be set to 0. You can play around with your “max” values so that your data is clearly displayed. SET YOUR X & Y LIMITS IN SETTINGS TAB.

  9. NEXT STEP: GRAPH USING ONLINE GRAPHING CALCULATOR. • ***I PREFER http://my.hrw.com/math06_07/nsmedia/tools/Graph_Calculator/graphCalc.html*** BEFORE LOAN IS PAID OFF: COST: c = 3x + 6778 REVENUE: r = 9x AFTER LOAN IS PAID OFF: COST: c = 3x + 4000 REVENUE: r = 9x 3. CLICK GRAPH BUTTON. WHERE LINES INTERSECT IS WHERE BREAKEVEN POINTS ARE.

  10. NEXT STEP: GRAPH USING ONLINE GRAPHING CALCULATOR. • ***I PREFER http://my.hrw.com/math06_07/nsmedia/tools/Graph_Calculator/graphCalc.html*** BEFORE LOAN IS PAID OFF: COST: c = 3x + 6778 REVENUE: r = 9x AFTER LOAN IS PAID OFF: COST: c = 3x + 4000 REVENUE: r = 9x 4. UNDER INTERSECTION TAB, CLICK “FIND INTERSECTING POINTS” BUTTON. YOU SHOULD DO THIS TWICE. ONCE FOR BEFORE LOAN IS PAID OFF, AND ONCE FOR AFTER THE LOAN IS PAID OFF. ROUND ALL VALUE UP TO NEAREST WHOLE NUMBER. IN THIS CASE MY INTERSECTING POINTS MEAN THAT I NEED 1130 CUSTOMERS TO PAY $10,167 WORTH OF BILLS.

  11. NEXT STEP: FIGURE NUMBER OF CUSTOMERS NEEDED FOR $3000 PROFIT. GRAPH USING ONLINE GRAPHING CALCULATOR. BEFORE LOAN IS PAID OFF: COST: c = 3x + 9778 REVENUE: r = 9x AFTER LOAN IS PAID OFF: COST: c = 3x + 7000 REVENUE: r = 9x ENTER YOUR 2 DIFFERENT COST EQUATIONS ADDING $3000. REVENUE STAYS THE SAME. REPEAT PROCESS OF STEPS FROM STEPS 2, 3 & 4 TO GET NUMBER OF CUSTOMERS

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