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Urijah is starting a food cart business. The cost to start the business is $20,000 and the monthly costs are $8,000. He has been earning $8,800 every month in revenue. In how many months will Urijah's business break-even and earn a profit?



Answer :

He will break even on the 25th month.

How to find the number of month his business will break even?

The cost to start the business is $20,000 and the monthly costs are $8,000.

He has been earning $8,800 every month in revenue.

Profit = Selling Price - Cost Price

Therefore,

let

x = number of month

Hence,

selling price = 8800x

cost price = 20000 + 8000(x) = 20,000 + 8000x

Therefore,

profit =  8800x - (20,000 + 8000x)

profit = 8800x - 20000 - 8000x

profit = 8800x - 8000x - 20000

profit = 800x - 20000

Hence,

The month when they will break even is as follows:

8800x = 20,000 + 8000x

20000 = 8800x - 8000x

20000 = 800x

x = 20000 / 800

x = 25

Therefore, he will break even on the 25th month.

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