Elucidate and show any relevant calculations

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Reference no: EM1367758

Q. 1. You have opened your own word-processing service. You bought a personal calculator and paid $5,000 for it. Though, due to cost changes in calculator industry, current cost of an equivalent machine is $2,500. You could sell any used machine for $1,000. If you were not word processing, you could earn $20,000 per year at an alternative job. Assume that interest rate is 10%. You can also hire an assistant who can do everything that you can do for $20,000 per year (you would still continue to do word processing).
One person utilizing one calculator can produce 11,000 typed pages per year and cost per page for your service is $2.

You are considering three options:

(1) Expand your business by hiring an assistant.

(2) Leave your business way it is

(3) shut down. Based on costs and revenues above, which should you do? Elucidate and show any relevant calculations.

Reference no: EM1367758

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