A man formerly employed as a chief mechanic of an automobile repair shop has saved P1,000,000 which are now invested in certain securities giving him an annual dividend of 15%. He now plans to invest this amount in his own repair shop. In his present job, he is earning P25,000 per month, but he has to resign to run his own business. He will need the services of the following: 2 mechanics each earning P400 a day, and 8 helpers earning P200 a day. These men will work on average 300 days a year. His other expenses are the following: Rental = P30,000 a month Miscellaneous P25,000 a month %3D Sales tax = 3% of gross income Insurance = 2% The length of his lease is 5 years. If the average charge for each car repair by his shop is P1,000. Determine the number of cars he must service in one year so that he will obtain a profit of at least 20% on his investment?
A man formerly employed as a chief mechanic of an automobile repair shop has saved P1,000,000 which are now invested in certain securities giving him an annual dividend of 15%. He now plans to invest this amount in his own repair shop. In his present job, he is earning P25,000 per month, but he has to resign to run his own business. He will need the services of the following: 2 mechanics each earning P400 a day, and 8 helpers earning P200 a day. These men will work on average 300 days a year. His other expenses are the following: Rental = P30,000 a month Miscellaneous P25,000 a month %3D Sales tax = 3% of gross income Insurance = 2% The length of his lease is 5 years. If the average charge for each car repair by his shop is P1,000. Determine the number of cars he must service in one year so that he will obtain a profit of at least 20% on his investment?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:A man formerly employed as a chief mechanic of an automobile repair shop has saved P1,000,000 which are
now invested in certain securities giving him an annual dividend of 15%. He now plans to invest this amount
in his own repair shop. In his present job, he is earning P25,000 per month, but he has to resign to run his
own business. He will need the services of the following: 2 mechanics each earning P400 a day, and 8 helpers
earning P200 a day. These men will work on average 300 days a year. His other expenses are the following:
Rental
= P30,000 a month
Miscellaneous = P25,000 a month
Sales tax
3D3% of gross income
Insurance
2%
The length of his lease is 5 years. If the average charge for each car repair by his shop is P1,000. Determine
the number of cars he must service in one year so that he will obtain a profit of at least 20% on his
investment?
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