Reference no: EM133111654
Question - In March 2017, Bob and Carol Finn started their carpet-cleaning services business in Toronto. The business was geared primarily at young couples, a market that they felt was growing rapidly. Bob and Carol had worked during the previous 10 years as salaried employees for different types of organizations.
They were frustrated with the fact that their future was in the hands of employers, so they decided to start B & C Carpet Cleaning Services. After 10 years of tremendous success in the business, the couple decided to launch a franchise.
They placed advertisements in different daily newspapers across Canada promoting the franchise business. Jerry and Ann Robinson of Ottawa saw the advertisement and called B & C for information about the economics and advantages of managing a carpet-cleaning franchise operation. The Finns provided the following information:
Average revenue for cleaning carpets in each household is $120.
A 20% sales commission per contract is secured by a sales representative.
Machine operators receive $30 for cleaning the carpets in each household.
Average costs for gas and maintenance for trucks for each household is $5.50.
Maintenance charges are $400 per machine for each 100 houses cleaned.
Monthly rental charges for office and small warehouse for inventories is $1,200.
Annual depreciation for the equipment is $500.
Monthly salary paid to Jerry and Ann would total $3,500.
Other costs include the following:
A $1,400 monthly salary for office employees.
A $500 yearly expense for various insurance policies.
A $125 monthly expense for utilities and telephone.
A yearly $10,000 fee for the franchise.
A $5.00 franchise fee for each household cleaned.
Required - Based on the above information, calculate the following:
1. How many carpets would Jerry and Ann have to clean each year to start making a profit?
2. How much revenue would they have to earn each year in order to break even?
3. How many carpets would they have to clean each year if they want to earn a yearly profit of $45,000 before tax?
|
What are the tax consequences
: Mrs Walker, a computer consultant, did some work for Micro Inc. The agreed fee for her work was $12,000. Her husband is out of work; therefore she invoiced Micr
|
|
What is the dtl
: An analyst gathered the following information regarding Violet Inc.: Number of units sold = 500,000. What is the DTL
|
|
What is the mirr of a project
: Tall Trees, Inc. is using the modified internal rate of return (MIRR) when evaluating projects. The company is able to reinvest cash flows received from the pro
|
|
Distribution assumptions of the bsm model
: A stock has an expected return (µ) of 17% per annum and a standard deviation (volatility, s) of 37% per annum. Under the probability distribution assumptions of
|
|
How many carpets would jerry and ann have
: Average costs for gas and maintenance for trucks for each household is $5.50. How many carpets would Jerry and Ann have
|
|
Reasons supporting the opposite conclusion
: The city of Pawnee's municipal council consists of several departments, one of which is the Parks and Recreation department. Their role is to design and build p
|
|
Calculate the time-weighted returns
: Given the following cash flow and holding period returns (HPRs), calculate the time-weighted returns (TWR) from the HPRs and the IRR from the cash flow
|
|
Design a program that creates a car object
: Design a class as well as a program that creates an object and calls methods - design a program that creates a Car object and then calls the accelerate method
|
|
What is their ytm
: Raines Umbrella Corp. issued 10-year bonds two years ago with a coupon rate of 10 percent. If these bonds currently sell at a price of 115, what is their YTM
|