Reference no: EM132939005

Question - Use the information below and try to determine if this company was profitable. Rashid sold and fitted ten TV satellite dishes in his first month of trading. He had bought 50 satellite dishes from a website specializing in stock sell-offs from failed businesses. He paid $100 each. This used up most of his start-up capital. He rented a small truck for $120 a month. A large advertising sign had cost him $ I 20. Other advertising costs in his first month had been more than expected. The local newspaper had increased its classified rates - $150 was $30 more than planned. He sold the satellite dishes for $275 fully fitted. Rashid could have just sold the dishes themselves, but he wanted to "add value" to them by doing the fitting too. Each fitting kit cost Rashid $10. Other costs - such as road tax and insurance on the truck - totaled $200 per month, just as predicted. He started to work out his profit for the first month. His only real worry was that two of his customers had asked if they could delay paying him. He had agreed as he wanted to make the sale. But when would they pay? Should he include these two satellite dishes when working out his first monthly profits?

Try to determine if Rashid made money in his first month of business. Use the space below.