A financial services consulting company bought an office building for $900,000. The company has 10 professional staff members. Monthly expenses for salaries, utilities, grounds maintenance, etc. are $1.1 million. The average billing rate per professional is $90 per hour. Use an interest rate of 1% per month and assume the building will have a resale value of $1.5 million after 10 years. (a) How many hours per month must be billed in order to make a profit of $15,000 per month? (b) How many hours per professional per month must be billed? (c) There are 260 eight-hour workdays per year. Of the total work hours available per month, what percentage does the hours per professional in part (b) represent?
A financial services consulting company bought
an office building for $900,000. The company has
10 professional staff members. Monthly expenses
for salaries, utilities, grounds maintenance, etc. are
$1.1 million. The average billing rate per professional
is $90 per hour. Use an interest rate of 1%
per month and assume the building will have a resale
value of $1.5 million after 10 years. (a) How
many hours per month must be billed in order to
make a profit of $15,000 per month? (b) How
many hours per professional per month must be
billed? (c) There are 260 eight-hour workdays per
year. Of the total work hours available per month, what percentage does the hours per professional in
part (b) represent?
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