Sam quit his job and started his own business. He made a $100,000 salary at his old job. The company paid $10,000 a year for his family's health insurance premium and paid him $5,000 in profit sharing in the year. He owns some commercial property that he used to rent out and make $20,000 a year. Now he uses that property for his new business. With his new business, in his first year, he paid his production workers $125,000. He paid a salesperson $60,000 in commissions. His gas and utilities came to $12,000. He put in $50,000 of his own money that he could have made 2% a year in the bank. He also spent $14,000 in advertising and $20,000 for a business consultant. In his first year as a business owner, Sam made $300,000 in sales.

Sam quit his job and started his own business. He made a $100,000 salary at his old job. The company paid $10,000 a year for his family's health insurance premium and paid him $5,000 in profit sharing in the year. He owns some commercial property that he used to rent out and make $20,000 a year. Now he uses that property for his new business. With his new business, in his first year, he paid his production workers $125,000. He paid a salesperson $60,000 in commissions. His gas and utilities came to $12,000. He put in $50,000 of his own money that he could have made 2% a year in the bank. He also spent $14,000 in advertising and $20,000 for a business consultant. In his first year as a business owner, Sam made $300,000 in sales.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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