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Project revenue, costs and profits for XYZ Payroll Services

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XYZ Payroll Services during the current year is around 50,000 worker hours and with current operations covers all customer demand. XYZ Payroll Services is planning on a 5% growth rate each year. If we let x= total worker-hours, XYZ Payroll Services will incur a one-time cost of $15x to expand. Each customer serviced incurs a variable cost of $3.00 per worker-hour total then XYZ Payroll Services $6.00 per worker - hour of capacity per year. XYZ Payroll Services garners $25 per worker hour from its customers.

What is the projected revenue, costs, and potential profits would be over the next 10 years based on the current capacity, 50,000 worker-hours, and expansion to 70,000 worker-hours, and an expansion to 90,000 worker-hours?

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Report created in Excel for student. Formulas are used in cells.

Solution provided by:
Carol Sargent, PhD
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  • BSc, University of Virginia
  • MSc, University of Virginia
  • PhD, Georgia State University
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