Elise and Ling decide to start a tutoring business. To start their business, they need to...
Elise and Ling decide to start a tutoring business. To start
their business, they need to invest in buying 2 units of the most
recent version of MacBook Pro which costs $2500 for one unit. The
cost of hiring employees will be $25,000 per year, cost of office
supplies $1000 per year, and the cost for advertising their
business will be $4,000 per year. The market interest rate is 20%
and suppose the value of the computers does not change over
time.
1. What is the least amount of revenue per year they must have
expected to start this business?
a. $30,000
b. $31,000
c. $35,000
d. $36,000
2. Suppose the normal rate of return is 20%. How much profit
should they earn to be the normal rate of return?
a. -$1000
b. $0
c. $1,000
d. $5,000
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Elise and Ling decide to start a tutoring business. To start
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