A man formerly employed as a chief mechanic of an automobile repair shop has saved P1,000,000 which are now invested in certain securities giving him an annual dividend of 15%. He now plans to invest this amount in his own repair shop. In his present job, he is earning P25,000 per month, but he has to resign to run his own business. He will need the services of the following: 2 mechanics each earning P400 a day, and 8 helpers earning P200 a day. These men will work on average 300 days a year. His other expenses are the following: Rental = P30,000 a month Miscellaneous P25,000 a month %3D Sales tax = 3% of gross income Insurance = 2% The length of his lease is 5 years. If the average charge for each car repair by his shop is P1,000. Determine the number of cars he must service in one year so that he will obtain a profit of at least 20% on his investment?
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- A man formerly employed as chief mechanic of an automobile repair shop has saved P1,000,000.00 which are now invested in certain securities giving him an annual dividend of 15%. He now plans to invest this amount in his own repair shop. In his resents job, he is earning P25,000.00 a month, but he has to resign to run his own business. He will need the services of the following: 2 mechanics each earning P400.00 a day, and 8 helpers each earning P200.00 a day. These men will work on the average300 days per year. His other expenses are the following: Rental 30, 000.00 a monthMiscellaneous 25,000 a monthSales tax 3% of gross incomeInsurance 2% The length of his lease is 5 years. If the average charge for each car repaired by his shop is P1,000.00.Determine the number of cars he must service in one year so that he will obtain a profit of at least 20% on his investment?PLEASE SHOW YOUR SOLUTIONS PLEASE. THANK YOU! 1. A man formerly employed as a chief mechanic of an automobile repair shop has saved P1,000,000 which are now invested in certain securities giving him an annual dividend of 15%. He now plans to invest this amount in his own repair shop. In his present job, he is earning P25,000 per month, but he has to resign to run his own business. He will need the services of the following: 2 mechanics each earning P400 a day, and 8 helpers earning P200 a day. These men will work on average 300 days a year. His other expenses are the following: Rental = P30,000 a month Miscellaneous = P25,000 a month Sales tax = 3% of gross income Insurance = 2% The length of his lease is 5 years. If the average charge for each car repair by his shop is P1,000. Determine the number of cars he must service in one year so that he will obtain a profit of at least 20% on his investment?George used to work as a research analyst earning $80,000 per year. George has decided that he has had enough of the rat race and has decided to start his own business, and so he bought a local kebab shop for $45,000. To pay for the business, he took out his term deposit of $90,000 which until then was earning him 5.6% interest p.a. With the remainder of the money, he used it to pay a part time assistant of $25,000, and he runs the business by himself the rest of the time. He used the remainder of the money to pay for stock. In his first year of the business, George took in $50,00o sales. (a) As an accountant, work out Georges profit during the first year of trading. (b) As an economist, work out George's profit during the first year of trading.
- A man formerly employed as a chief mechanic of an automobile repair shop has saved P1,000,000 which are now invested in certain securities giving him an annual dividend of 15%. He now plans to invest this amount in his own repair shop. In his present job, he is earning P25,000 per month, but he has to resign to run his own business. He will need the services of the following: 2 mechanics each earning P400 a day, and 8 helpers earning P200 a day. These men will work on average 300 days a year. His other expenses are the following: Rental = P30,000 a month Miscellaneous = P25,000 a month Sales tax = 3% of gross income Insurance = 2% The Length of his lease is 5 years. If the average charge for each car repair by his shop is P1,000. Determine the number of cars he must service in one year so that he will obtain a profit of at least 20% on his investment?Sam Smith is currently employed as a mechanical engineer and is paid$65,000 per year plus benefits that are equal to 30 percent of his salary. Sam wants to begin a consulting firm and decides to leave his current job.After his first year in business, Sam’s accountant informs him that he hasmade $45,000 with his consulting business. Sam also notices that he paid$6,000 for a health insurance policy, which was his total benefit during hisfirst year. What was Sam’s opportunity cost?Joe is self-employed in a store that has a rental value of R500 a month which he pays, but he can vacate the building without giving notice. His other expenses are R100 a month for maintenance. He makes R25 000 a year on net sales (total revenue minus the wholesale cost of the product). If he quit his job and worked the same number of hours elsewhere at a job he liked equally well, he estimates that he could make R20 000 a year. No one else can be hired to work in the store. Suppose that Joe had a long term lease which requires him to pay the rent even if he doesn't operate the store. What should Joe do?
- An engineer changed jobs and is signing up for benefits. The company 401(k) includes a low-cost fund that is expected to earn 5.3% annually. The engineer’s employer will contribute up to 2% by matching half the employee contribution. So she will save at least 4% of her salary of $80,000 into the account. She expects her salary to increase 2.5% per year. What is the value of the account after 15 years if she deposits the 4% minimum?Your father's employer was just acquired, and he was given a severance payment of $375,000, which he invested at a 7.5% annual rate. He now plans to retire, and he wants to withdraw $35,000 at the end of each year, starting at the end of this year. How many years will it take to exhaust his funds, i.e., run the account down to zero?Steven John owns a cab for which he purchased a Rs. 18,000 operating licence two years ago. Mr. John makes Rs. 36,000 per year as an individual, but has the option of selling the cab and permit for Rs. 73,000 and working as a dispatcher for Santino Taxi Co. For a 40-hour week, the dispatcher role earns Rs. 31,000 per year. Mr. John works about 55 hours each week driving his own cab. He will invest Rs. 73,000 if he sells his firm and can make a 10% return. Needed 1. Calculate the opportunity cost of owning and managing your own firm. 2. Should Mr. John sell the cab and take the dispatcher post merely on financial grounds? 3. Discuss the qualitative and quantitative elements that Mr. John should take into account.
- Gomez runs a small pottery firm. He hires one helper at $12,000 per year, pays annual rent of $5,000 for his shop, and spends $20,000 per year on materials. He has $40,000 of his own funds invested in equipment (pottery wheels, kilns, and so forth) that could earn him$4,000 per year if alternatively invested. He has been offered $15,000 per year to work as a potter for a competitor. He estimates his entrepreneurial talents are worth $3,000 per year. Total annual revenue from pottery sales is $72,000. Calculate the accounting profit and the economic profit for Gomez’s pottery firm. d. How much is the total implicit cost? (Use a whole number, no currency, no comma, no space) e. How much is the economic profit? (Use a whole number, no currency, no comma, no space)Jane just inherited $30,000 from a rich uncle. She decides to invest the money for a period of 5 1) years and then use the accumulated amount to make a down payment on a new house. EzMoney, Inc. is willing to pay 6% per year compounded monthly on a five-year investment, but they will charge an administrative fee that is 2% of the amount invested and this has to be paid initially at the time of investment. HiReturn, Inc., offers 5.75% per year compounded daily if she deposits the entire amount in their premier investment fund. Which investment option should Jane choose and why?Henri quit his job as a teacher earning AUD 70,000 per year to start his own food kiosk business. To save on rent, Henri utilized his own property. He normally earned AUD 50,000 annual rent from this property. Also, to start the business, Henri used AUD 60,000 from his own savings which he earned 4% interest per year. Further in order to start the business, Henri borrowed $40,000.00 from the bank and was paying 6% interest per year. Henri’s first year of business can be summarized as follows: Item Amount $ Revenue- Food section 250,000 Revenue- Liquor 180,000 Revenue-Soft drinks 40,000 2 Cashiers expense (wages per worker) (30,000) Food van (100,000) Manager wages (60,000) Food preservatives (30,000) Equipment expense (60,000) Motorcycle expense to ease movement in city (30,000) 2 food freezers (cost per freezer) (5000) Based on your calculations of accounting profit and economic profit, would you advise Henri to return to his teaching job or continue…