Profitable business under certain conditions

Reference no: EM13139918

Jenny is considering opening her own business.

Jenny believes that, with a $30,000 vehicle with a $5,000 salvage value after 10 years and $5,000 in assembly tools and equipment (also a 10-year life), she will be able to generate $70,000 a year in sales. Her other projections include an initial inventory of $15,000, assembly training for $2,500, cost of goods sold (COGS) approximately $35,000, selling expenses of $9,000 and general and administrative expenses of $7,000. She expects to pay 25% of her earnings in taxes and must earn a 15% return. Is this a profitable business under these conditions?

Reference no: EM13139918

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