What is the return on the owners investment in each case

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Question - A business needs $1,000 to start and expects

Sales $2,000

Expenses $1,850

Tax rate 33% of earnings

Answer the following questions and SHOW ALL CALCULATION DETAILS TO GET CREDIT.

A. What are earnings if the owners invest $1,000 of their own money in the business (no debt, all equity)?

B. If the business borrows $400 of the $1,000 at an interest rate of 10%, what are the business' net earnings?

C. What is the return on the owners' investment in each case?

Reference no: EM133163576

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