How much is the opportunity cost associated with starting the new business?
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Paula has the following information to evaluate—her current salary of $59,000 versus total revenues of $170,000 and expenses of $76,000 from starting a new business. How much is the opportunity cost associated with starting the new business?
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- Consider the following scenario in relation to your Notary, Loan Signing Agent and Marriage officiant practice in Hawaii and determine the opportunity cost of leaving your job to become an entrepreneur. You currently make $90,000 per year at your job plus benefits (equal to 30% of your salary). On January 1 of the New Year, you start your own business. After the first year, your accountant informs you that you made $45,000 and out of that you paid $6,000 for health insurance. What was your opportunity cost? If your opportunity cost is higher than you would like, how can you lower your opportunity cost in the future years?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?You start a baking business,and your goal is to earn a profit of 250 in the first month. Your expenses in the first month are 155.What are your posible revenues that you can earn to meet your goal
- Brenda Sheldon, CPA, pays her new staff accountant, Abby , a salary equivalent to $21 per hour while Brenda receives a salary equivalent to $37 per hour. The firm's predetermined indirect cost allocation rate for the year is $11 per hour. Sheldon bills for the firm's services at 34% over cost. Assume Brenda works 6 hours and Abby works 8 hours preparing a tax return for Mikayla Touchstone. 1. What is the total cost of preparing Touchstone's tax return? 2. How much will Brenda bill Touchstone for the tax work?Joye started her home business in 2020 and the results of her operations are given below. Gross Income: $65,000 Domestic business travel details: Airfare $600 Meals 350 Entertainment 100 Car rental 250 Personal Site seeing costs 300 Total travel costs 1,600 Contribution to political campaigns 300 Total entertainment 3,500 Business gifts, 10 distributed at $45 each 450 Rent and utilities on her apartment, 30% attributable to home office…Wendy decides to open her own business and earns 70,000 in accounting profit the first year. When deciding to open her own business she withdrew 20,000 from her savings which earned 2.5 percent interest took over a building that she owns and was renting to her friend for 12,500 a year. She also turned down three separate job offers with annual salaries of 30000 40,000, And 47,000 1. Determine Wendy’s total implicit costs? Explain in detail 2. What is Wendy’s economic profit from running her own business ? Explain in detail show all calculations
- answer the following questions and show your steps for your calculations (you must show the applicable details for each question; for example YMPE = $, YBE = $, Contribution Rate = %): . Assume the year is 2021. Rachel who just turned 28 works for Tech Industries and makes an annual income of $52,000. Calculate total employee and employer contributions. b) Sasha has been employed with Planters Inc. since 2012. She earned a salary of $85,000 this year. Calculate total employer and employee contributions. c) Angela’s dad had hired her to work part time for his business while she was in grade 8. He had her doing some filing and answering phones over the summer and paid her $22,500. Calculate total employee and employer contributions. d) Qui had just turned 18 and made $2,495 while going to school. Calculate total employee and employer contributions. e) Terence is self-employed and made an income of $222,000 this year. Calculate both the employer and employee contribution. f) Franco has a…Mary Graham worked as a real estate agent for Piedmont Properties for 15 years. Her annual income is approximately $100,000 per year. Mary is considering establishing her own real estate agency. She expects to generate revenues during the first year of $2 million. Salaries paid to her employees are expected to total $1.5 million. Operating expenses (i.e., rent, supplies, utility services) are expected to total $250,000. To begin the business, Mary must borrow $500,000 from her bank at an interest rate of 15 percent. Equipment will cost Mary $50,000. At the end of one year, the value of this equipment will be $30,000, even though the depreciation expense for tax purposes is only $5,000 during the first year.a. Determine the (pre-tax) accounting profit for this venture.b. Determine the (pre-tax) economic profit for this venture.c. Which of the costs for this firm are explicit and which are implicit?The owners of a small manufacturing concern have hired a vice president to run the company with the expectation that he will buy the company after five years. Compensation of the new vice president is a flat salary plus 75% of the first $150,000 profit, and then 10% of profit over $150,000. Purchase price for the company is set at 4.5 times earnings (profit), computed as average annual profitability over the next five years. a.Plot the annual compensation of the vice president as a function of annual profit.
- Claire is planning annual end of year withdrawals from her tax-free account after retirement for 35 years. She has Principal of $755,000, Investment return is 6%, Initial withdrawal $40,000 and annual increase of withdrawal $1,000. Show the work if Claire is possible to continue withdrawing for 35 years? In order for her to do that, what does she have to do?( show excel function & cell reference)Josh is an employee of a large Accounting firm in the city earning $120,000 peryear. On weekends, to earn extra income, she established a small businessselling Pokemon soft toys at the local market. In the first year of operating herbusiness, she earned $8,000 revenue and incurred expenses of $10,000. Can heoffset this loss against her salary income of $120,00? Would your answers will bedifferent if Joss has been doing business this year for the past 5 years and the itwas profitable on the first 3 years.Answer the following problems and explain it step by step: 1. A man who is 30 years old at the start of the year, is considering getting an MFM degree. He currently earns $40,000 per year and expects to continue earning that amount for the rest of his working life (until age 65). He will give up his income for two years and will pay $20,000 per year in tuition, if he attends business school. In exchange, he expects a raise in his salary after completing his MFM. Assume that the post-graduation salary grows at a 5% annual rate and that the discount rate is 8%. What is the minimum expected starting salary after graduation for him that makes attending business school a positive-NPV investment? (Assuming that all cash flows happen at the end of each year.) 2. Bob and Rose are both 62 years old and plan to retire in 3 years. They will receive $5,000 per month after taxes from pension plans and $1,000 per month after taxes from Social Security after retirement. Regrettably, their living…
