(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.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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(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.
Transcribed Image Text:(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.
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