Reference no: EM132011164

Question - Rustic Interiors, an interior design company has experienced a drop in business do to an increase in interest rates and a corresponding slowdown in remodeling projects. To stimulate business, the company is considering exhibiting at the Middleton Home and Garden Expo. The exhibit will cost the company $15,000 for space. At the show, Rustic interiors will present a slide show on a laptop, pass out brochures that were printed previously (the company printed more than needed), and show its portfolio of previous jobs. The company estimates that revenue will increase by $40,000 over the next year as a result of the exhibit. For the previous year, profit was as follows:

Revenue $212,500

Less:

Design supplies $18,000

Salary of Samantha Spade (owner) 82,000

Salary of Kim Bridesdale (full-time employee) 56,000

Rent 19,000

Utilities 7,000

Depreciation of office equipment 4,000

Printing of advertising materials 800

Advertising in Middleton Journal 3,000

Travel expenses other than depreciation of autos 3,000

Depreciation of company cars 10,000 202,800

Net income $9,700

Question: Calculate the impact of the exhibit on company profit. Should the company exhibit at the home show?