You are the owner and only employee of a company that sets odds for sporting events. Last year you earned a total revenue of $100,000. Your costs for rent and supplies were $50,000. To start this business you invested an amount of your own capital that could pay you a return of $20,000 a year. During the year your economic costs were: $50,000 O $60,000 O $20,000 O $70,000

You are the owner and only employee of a company that sets odds for sporting events. Last year you earned a total revenue of $100,000. Your costs for rent and supplies were $50,000. To start this business you invested an amount of your own capital that could pay you a return of $20,000 a year. During the year your economic costs were: $50,000 O $60,000 O $20,000 O $70,000

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Sarah earns an annual salary of £76,000, working for an investment bank. She is considering resigning and setting up her own business. Sarah estimates that the new business requires an initial investment of £96,000 for fixed assets with an expected useful life of five years. Forecast revenues and expenses for the first year of operations are. Sales Operating Expenses Rent Lease of equipment Staff salaries Supplies Utility bills Insurance Business rates Advertising Legal, audit and banking fees £320,000 £52,000 £13,250 £126,500 £22,000 £8,500 £2,500 £4,200 £7,000 £2,500 Sarah has personal savings sufficient to finance 70% of the initial investment. She is currently earning an annual interest rate of 1.2% on the savings. The rest of the investment finance would be provided by a five-year bank loan at a fixed annual rate of 5.9%. Required: a) Calculate the accounting profit for the first year of operations. Assume that the fixed assets are fully depreciated on a…
A small entrepreneur invested a capital of ₱ 80,000 for a buy and sell business. He estimated to have a gross income of ₱ 25,000 annually and an operating cost of ₱ 6,000 annually. It is assumed the business to have a life of 10 years. If the rate of interest is 12%. Compute the benefit cost ratio
Theresa is considering starting a small business. She plans to purchase equipment costing $145,000. Rent on the building used by the business will be $26,000 per year while other operating costs will total $30,000 per year. A market research specialist estimates that Theresa's annual sales from the business will amount to $80,000. Theresa plans to operate the business for 6 years. Disregarding the effects of taxes, what will be the amount of annual net cash flow generated by the business? A) $24,000 B) $56,000 C) $80,000 D) None of these answers is correct.
The initial investment of the owner in his business is ₱100,000.00 At the end of each year, the total assets of the business amounted to ₱125,000.00 this consists of ₱70,000.00 cash. On the first month fbits operations, the owner purchased an equipment worth ₱50,000 she paid 30,000 as the down payment and the rest will be paid in the succeeding month. She received 10,000.00 cash from its clent and paid an expenses of 4,000.00. Show how the transaction affect the accounting equation
A proprietor who just inherited a building is considering using it in a new business venture.Projections for the business are: revenue of $100,000, fixed cost of $30,000, and variable costof $50,000. If the business is not started, the owner will work for a company for a wage of$23,000. Also, there have been two offers to rent the building, one for $1,000 per month andone for $1,200 per month. What are the expected annual net economic profits (losses) to theowner if the new business is started? A. $20,000 B. $(3,000) C. $(15,000) D. $(17,400)
A certain company pays a bonus to each engineer at the end of each year based on the company’s profit for that year. If the company invested $ 2 million to start up, what rate of return has it made if each engineer’s bonus has been $3000 per year for the past 10 years? Assume the company has six engineers and that the bonus money paid represents 5% of the company’s profit.
you invested 10,000 dollars into a business venture. One year later you realized a profit of $1,400. What is your annual rate of return?
I need help solving the bolded question in excel. i have included the first question it is referring to 6. Suppose you purchased equipment and agreed to pay the manufacturer $100,000 in 4 years for the equipment. What should you record the cost of the equipment today if your cost of capital is 5%? 7.In the above example, what would you record the cost of the equipment if you make four annual payments of $25,000 at the end of each year?
You have just completed the first year of operation for your business andhave the following information: sales, $200,000; cost of goods, $140,000;rent, $18,000; utilities, $8,400; insurance, $2,000; equipment, $3,500;interest, $10,000. Your forecast indicates that your sales will increase by20 percent. Your rental agreement provides for a 3 percent increase peryear. You read an article indicating that utility costs in your area willincrease by 10 percent next year. You just received a notice from yourinsurance company stating that your quarterly premium is increasing to$600 beginning the first quarter of next year. Your equipment expense willnot change, but the amortization schedule on your current loan indicatesthat interest expense for next year should be $9,000.a. Using this data, construct an actual income statement for this year and a proforma income statement for next year.b. By what percentage did your net income change?c. What are your current profit margin and your pro forma…
A businessman invested to a medium scale business with a net annual return of P 50,000 each year for 5 years. Compute the amount of invested money if the annual interest is 7% and the benefit-ratio is 1.20. a. P12,148.00 b. P12,841.00 c. P12,418.00 d. P11,418.00
This morning, Mariam Inc invested $800,000 to help fund a company expansion project planned for 4 years from now. How much additional money will the firm have 4 years from now if it can earn 5.59 percent rather than 4.59 percent on its savings? Kindly sole with formula not excel
A company invested capital of $6,000,000 on an engineering fabrication that ensure a revenue of $2,900,000 each year for five years. His equipment, with a life of five years, will have a trade-in value of $600,000. The cost of operation and maintenance will be $1,200,000 per year. Taxes and insurance will be 2% of the first cost per year. He expects his capital will earn not less than 15%. Is the investment justifiable? Solve by a.) Rate of Return Method b.) Annual Worth Method and c. ) Present Worth Method