A man is considering investing Php500,000 to open a semi-automatic auto-washing business in a city of Php400,000 population. The equipment can wash, on the average, 12 cars per hour, using two men to operate it and to do small amount of hand work. The man plans to hire two men, in addition to himself, and operate the station on an 8-hour basis, 6 days per week, 50 weeks per year. He will pay his employees Php25.00 per hour. He expects to charge Php25.00 for car wash. Out-of-pocket miscellaneous cost would be Php8,500 per month.
A man is considering investing Php500,000 to open a semi-automatic auto-washing business in a city of Php400,000 population. The equipment can wash, on the average, 12 cars per hour, using two men to operate it and to do small amount of hand work. The man plans to hire two men, in addition to himself, and operate the station on an 8-hour basis, 6 days per week, 50 weeks per year. He will pay his employees Php25.00 per hour. He expects to charge Php25.00 for car wash. Out-of-pocket miscellaneous cost would be Php8,500 per month.
He would pay his employees for 2 week for vacations each year. Because of the length of his lease, he must write of his investment within 5 years. His capital now is earning15%, and he is employed at a steady job that pays Php25,000 per month. He desires a rate of return of at least 20% on his investment
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