Peta Barend earns £33,000 a year working for a textile company as an engineer. She is considering the possibility of leaving the company and starting her own business. To do this, she will have to use all her £50,000savings that are currently invested at an interest rate of 3 per cent. She estimates that the annual profit from her own business will be £46,000. Othe relevant costs in starting her own business amount to £2,250. Required: Using the information above, calculate the net relevant benefit of Peta starting her own business.
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- ASAP 1)Claire wants to start her own dog treat business. She can purchase a suitable factory for $250,000. Claire currently has $135,000 in the bank earning 6 percent interest per year. Suppose Claire purchases the factory using her own money and then borrows the rest from the bank at 6%. Claire also has to pay other costs of running her business in the amount of $15420 per month. These costs include paying for energy, heat and salary and benefits to workers. (The value of the business is not considered a cost. The business is an asset that retains its value and can be sold if the owner wishes.) a. What is Claire’s annual implicit cost of purchasing the factory? b. What is Claire’s annual explicit cost of purchasing the factory? c. If Claire brings in annual total revenue of $300,000 what is her annual economic profit?Allison is contemplating a job offer with an advertising agency where she will make $54 000 in her first year of employment. Alternatively, Allison can begin to work in her father's business where she will earn an annual salary of $38 000. If Allison decides to work with her father, the opportunity cost would be?Charlotte has just finished her MBA and started a career in banking investment, she wanted to have a new car as soon as possible. The price of the car is $ 28,320. She must also have clothes and coats for the job which costs $ 3,248. The salary for his job this year is $ 42,000 and next year it will be increasing to $ 46,000. The cost of living this year is $ 34,000. Charlotte plans to make the difference between income and expenditure for consumption by borrowing. Interest on the loan is 15% per year. Charlotte wants to pay the loan and interest within a year. How much money is left for next year that Charlotte can spend (consume)?
- (b) Samuel Gumede earns £39,000 a year working for a building company as a project manager. He is considering the possibility of leaving the company and starting his own business. To do this, he will have to use all his £60,000 savings that are currently invested at an interest rate of 2%. He estimates that the annual profit from his own business will be £50,000. Other relevant costs in starting his own business amount to £1,750. Required: Using the information above, calculate the net relevant benefit of Samuel starting his own business.Tina, an entrepreneurial business student, wants to set up a business completing tax forms for other students. Her price would be $41.00 for each job. Fixed expenses include $150.00 for the tax software which Tina would purchase. Tina would hire some accounting students to complete the forms, paying them for two hours at $13 per hour for each job. She would also have paper and supplies costs of $5 per job. How many jobs would she have to generate before she starts to make a profit? Make the assumption that it takes an accounting student two hours to complete one tax return.Jenny Jenks has researched the financial pros and cons of entering into a 1-year MBA program at her state university. The tuition and needed books for a master's program will have an upfront cost of $51,000. If she enrolls in an MBA program, Jenny will quit her current job, which pays $50,000 per year after taxes (for simplicity, treat any lost earnings as part of the upfront cost). On average, a person with an MBA degree earns an extra $21,000 per year (after taxes) over a business career of 39 years. Jenny believes that her opportunity cost of capital is 5.3%. Given herestimates, find the net present value (NPV) of entering this MBA program. Are the benefits of further education worth the associated costs? The net present value (NPV) of entering this MBA program is Are the benefits of further education worth the associated costs?
- Susan Jones has a job as a pharmacist earning $55,000 per year, and she is deciding whether to take another job as the manager of another pharmacy for $65,000 per year or to purchase a pharmacy that generates revenue of $250,000 per year. To purchase the pharmacy, Susan would have to use her $15,000 savings and borrow another $80,000 at an interest rate of 10 percent per year. The pharmacy that Susan is contemplating purchasing has additional expenses of $85,000 for prescription non-prescription drugs and lines of women's and men's personal hygiene products and cosmetics, $40,000 for one full time person and $20,000 for one part time person, $12,000 for rent and $2500 for electricity and $1300 for natural gas, $1200 for telecommunications. Depreciation and amortization expenses are $5500 Assume that income and business taxes are 35% and the repayment of the principal of the loan does not start before three years. Also assume that revenue is expected to grow at 4% per year and expenses…Kristi, a pharmacist, is planning to open her own pharmacy. Based on her experience in the field, Kristi expects her pharmacy to generate a minimum annual net profit that is equivalent to 20% of the annual sales revenues. Kristi has decided to run the pharmacy herself on full-time basis and to invest $150,000 of her own savings in this project. Suppose that Kristi’s alternative employment options are as follows: Continue to work as a medical representative for $24,000 per year. Accepts a junior managerial position in another company for $30,000 per year. Kristi expects to spend $100,000 per year on purchasing drugs, cosmetics, and other supplies to resell to her customers. She will also need to hire three employees: an assistant, an accountant, and a custodian, for whom the total salaries to be paid are expected to be $30,000 per year. Kristi owns the building in which her pharmacy is supposed to be. She could rent out the pharmacy-store space for $20,000 per year. The pharmacy…Susan is trying to decide whether or not to attend college during the next 12-week session. She has the following options: 1. Attend college full-time at a cost of $1,200 2. Attend college part-time at a cost of $500 and work part-time earning $1,900 3. Work full-time earning $4,900 What is Susan's incremental profit if she chooses option 3 over option 2?
- Susan Jones has a job as a pharmacist earning $45,000 per year, and she is deciding whether to take another job as the manager of another pharmacy for $55,000 per year or to purchase a pharmacy that generates revenue of $350,000 per year. To purchase the pharmacy, Susan would have to use her $20,000 savings and borrow another $90,000 at an interest rate of 8 percent per year. The pharmacy that Susan is contemplating purchasing has additional expenses of $100,000 for prescription non-prescription drugs and lines of women’s and men’s personal hygiene products and cosmetics, $45,000 for one full time person and $20,000 for one part time person, $12,000 for rent and $2500 for electricity and $1300 for natural gas, $1200 for telecommunications and . Depreciation and amortization expenses are $5500. Assume that income and business taxes are 35% and the repayment of the principal of the loan does not start before three years. Also assume that revenue is expected to grow at 5% per year and…Susan Jones has a job as a pharmacist earning $45,000 per year, and she is deciding whether to take another job as the manager of another pharmacy for $55,000 per year or to purchase a pharmacy that generates revenue of $350,000 per year. To purchase the pharmacy, Susan would have to use her $20,000 savings and borrow another $90,000 at an interest rate of 8 percent per year. The pharmacy that Susan is contemplating purchasing has additional expenses of $100,000 for prescription non-prescription drugs and lines of women’s and men’s personal hygiene products and cosmetics, $45,000 for one full time person and $20,000 for one part time person, $12,000 for rent and $2500 for electricity and $1300 for natural gas, $1200 for telecommunications and . Depreciation and amortization expenses are $5500. Assume that income and business taxes are 35% and the repayment of the principal of the loan does not start before three years. Also assume that revenue is expected to grow at 5% per year and…Maria earns $18 per hour in her current job and works 33 hours a week. Her disutility of effort is equivalent to a cost of $3 per hour of work. If she loses her job, she will receive unemployment benefit equivalent to $8 per hour. Additionally, being unemployed has psychological and social costs equivalent to $1 per hour. Then: Maria's employment rent if she can get another job with the same wage rate after 44 weeks of being unemployed is $7,700. Maria's reservation wage is $6 per hour. The employment rent per hour is $8. O Maria's employment rent if she can only get a job at a lower wage rate after 44 weeks of being unemployed is less than $7,700.