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John and his business partner plan make $10,000 profit on their first year of selling cakes. They plan to use 30% of the profits to repay the loan. The rest of the of the profits they are going to use 40% to purchase new equipment such a cake pans and other assets and the rest for working capital.
Calculate how much john and his partner will use for each of the following.
Problem 1. how much of the profit will end up as Working Capital?
Problem 2. how much will they reinvest in Capital Assets?
Problem 3. how much of the money will be used to repay the loan?
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