Revenues generated in first year of operations 15 million

Assignment Help Microeconomics

Reference no: EM13454568

You have worked as a real estate agent for 10 years and are earning about $100,000 per year with your current agency. You prepared the following information to use in evaluating the financial feasibility of starting your own agency:

Revenues generated during the first year of operations: $1.5 million
Salaries and other labor costs paid to employees during the first year of operations: $1 million
Operating expenses (e.g., rent, communications: $150,000
Equipment purchases: $100,000 with a 5 year straight line depreciation

You need $100,000 in equity, which you can withdraw from your bank account that is currently paying 2% per year in interest, and a $400,000 loan with a 15% interest rate.

a. What is your expected pretax accounting profit from your proposed agency?
b. What is your expected pretax economic profit from your proposed agency?
c. Identify the explicit versus implicit costs.

Reference no: EM13454568

Questions Cloud

At the beginning of 2008 fastforward has stockholders : at the beginning of 2008 fastforward has stockholders equity of 251000. during 2008 net income was 51000 and dividends

Identify internal control principles so 2 c the internal : identify internal control principles. so 2 c the internal control procedures in phillips company make the following

In each and every case give a description of a mutation or : consider a protein that has the following sequence of amino acid. this is the wild type protein sequence. met - thr -

Assume the significinat driver is equipment hours determine : assume the significinat driver is equipment hours. identify the expenses that would likely be traced to jobs using this

Revenues generated in first year of operations 15 million : you have worked as a real estate agent for 10 years and are earning about 100000 per year with your current agency. you

In each of the following independent cases the company : in each of the following independent cases the company closes its books on december 31.1 sanford co. sells 500000 of 10

Should management sell product a now or should product a be : a company has a process that results in 6000 pounds of product a that can be sold for 8 per pound. an alternative would

Fr this discussion choose one of the sources presented : 1.for this discussion choose one of the sources presented gatsby etc. and write a post where you analyze this

Determine the lump sum deposited today that will yield the : find the lump sum deposited today that will yield the same total amount as payments of 18000 at the end of each year

User Account

All Pages