In 2018 Giles inherited a storefront from his uncle and so he left his job as a school librarian (which paid $50,000 per year) to open a novelty shop called the Magic Box. Giles was able to make an assortment of trinkets using $20,000 worth of materials that he sold for a total of $60,000. In addition, he purchased another $170,000 worth of goods and resold them for $190,000. He pays $5,000 per year for electricity. In order to decorate his shop, he purchased $2,000 worth of memorabilia to hang on his walls using a loan from the bank that charges 10% interest. At the end of the year, he sold off the same memorabilia to another store for $1,000. While he knows he could have rented out his inherited storefront to Jamba Juice for $20,000 per year, he chose not to. Because of his use of the storefront, it went down in value from $500,000 to $490,000 (and it would not have lost this value if it was being used by Jamba Juice). 1. How much revenue did Giles’s business generate?
In 2018 Giles inherited a storefront from his uncle and so he left his job as a school librarian (which paid $50,000 per year) to open a novelty shop called the Magic Box. Giles was able to make an assortment of trinkets using $20,000 worth of materials that he sold for a total of $60,000. In addition, he purchased another $170,000 worth of goods and resold them for $190,000. He pays $5,000 per year for electricity. In order to decorate his shop, he purchased $2,000 worth of memorabilia to hang on his walls using a loan from the bank that charges 10% interest. At the end of the year, he sold off the same memorabilia to another store for $1,000. While he knows he could have rented out his inherited storefront to Jamba Juice for $20,000 per year, he chose not to. Because of his use of the storefront, it went down in value from $500,000 to $490,000 (and it would not have lost this value if it was being used by Jamba Juice).
1. How much revenue did Giles’s business generate?
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