A man formerly employed as chief mechanic of an automobile repair shop has saved P1,000,000.00 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 resents job, he is earning P25,000.00 a month, but he has to resign to run his own business. He will need the services of the following: 2 mechanics each earning P400.00 a day, and 8 helpers each earning P200.00 a day. These men will work on the average300 days per year. His other expenses are the following:Rental 30, 000.00 a monthMiscellaneous 25,000 a monthSales tax 3% of gross incomeInsurance 2%The length of his lease is 5 years. If the average charge for each car repaired by his shop is P1,000.00.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? 2. A man formerly employed as chief mechanic of an automobile repair shop hassaved P1,000,000.00 which are now invested in certain securities giving him anannual dividend of 15%. He now plans to invest this amount in his own repair shop. Inhis resents job, he is earning P25,000.00 a month, but he has to resign to run his ownbusiness. He will need the services of the following: 2 mechanics each earning P400.00a day, and 8 helpers each earning P200.00 a day. These men will work on theaverage300 days per year. His other expenses are the following:Rental30, 000.00 a monthMiscellaneous25,000 a monthSales tax3% of gross incomeInsurance2%The length of his lease is 5 years. If the average charge for each car repaired by hisshop is P1,000.00.Determine the number of cars he must service in one year so that hewill obtain a profit of at least 20% on his investment?

Introduction:- A man who worked as the primary mechanic at an auto repair shop accumulated…

Answered: A man formerly employed as chief…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Question

A man formerly employed as chief mechanic of an automobile repair shop has saved P1,000,000.00 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 resents job, he is earning P25,000.00 a month, but he has to resign to run his own business. He will need the services of the following: 2 mechanics each earning P400.00 a day, and 8 helpers each earning P200.00 a day. These men will work on the average300 days per year. His other expenses are the following:

Rental 30, 000.00 a month
Miscellaneous 25,000 a month
Sales tax 3% of gross income
Insurance 2%

The length of his lease is 5 years. If the average charge for each car repaired by his shop is P1,000.00.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?

2. A man formerly employed as chief mechanic of an automobile repair shop has
saved P1,000,000.00 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 resents job, he is earning P25,000.00 a month, but he has to resign to run his own
business. He will need the services of the following: 2 mechanics each earning P400.00
a day, and 8 helpers each earning P200.00 a day. These men will work on the
average300 days per year. His other expenses are the following:
Rental
30, 000.00 a month
Miscellaneous
25,000 a month
Sales tax
3% of gross income
Insurance
2%
The length of his lease is 5 years. If the average charge for each car repaired by his
shop is P1,000.00.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?

Expert Solution

Trending now

This is a popular solution!

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions