What is the expected pretax accounting profit

Assignment Help Econometrics
Reference no: EM13200198

You have worked as a real estate agent for 10 years and are earning about $100,000 per year with your current agency. You prepared the following information to use in evaluating the financial feasibility of starting your own agency:
Revenues generated during the first year of operations: $1.5 million
Salaries and other labor costs paid to employees during the first year of operations: $1 million
Operating expenses (e.g., rent, communications: $150,000
Equipment purchases: $100,000 with a 5 year straight line depreciation

You need $100,000 in equity, which you can withdraw from your bank account that is currently paying 2% per year in interest, and a $400,000 loan with a 15% interest rate.

What is your expected pretax accounting profit from your proposed agency?

Reference no: EM13200198

Questions Cloud

What is the objective of the firm : What is the objective of the firm and what is your objective in studying business? Are those objectives the same? Explain briefly.
Explain how long will it take your money to triple : how long will it take your money to triple if you originally invested $10,000 at 5.6% compounded annually?
How to identify the explicit versus implicit costs : You have worked as a real estate agent for 10 years and are earning about $100,000 per year with your current agency. You prepared the following information to use in evaluating the financial feasibility of starting your own agency.
State the probability that the green urn on any given round : The green urn contains 17 green balls and the red urn contains 15 red balls.Each round, one ball is chosen randomly from either urn. The probability that the green urn on any given round is chosen is 4/7.
What is the expected pretax accounting profit : You need $100,000 in equity, which you can withdraw from your bank account that is currently paying 2% per year in interest, and a $400,000 loan with a 15% interest rate. What is your expected pretax accounting profit from your proposed agency.
Script an equation that represents the amount n of plutonium : after the given number of years. Write an equation that represents the amount N of plutonium- 240 remaining after t years
Whether to facility or sell and rent the building : ABC is considering using the facility for a new training program. It could also rent a building about the same distance from its headquarters for $20,000 a year. A developer has offered ABC $2.5 million for its property.
Explain the kinetic energy of a moving object varies : The kinetic Energy (K) of a moving object varies jointly with its mass (m) and the square of its velocity (v). If an object has a mass of 22.5 kilograms and moving with a velocity of 20 meters per second has a kinetic energy of 4500 Joules
What is the percentage change in the price : Consider a 6-year coupon bond with 4% annual coupons and a $1,000 face value. How much will the price of the bond change if its yield to maturity decreases from 7% to 6%? What is the percentage change in the price?

Reviews

Write a Review

Econometrics Questions & Answers

  Determine which product mix should be pushed

Assume that product A requireds .5 hour per unit and B requires .25 hour per unit. If both products must go through the same manufacturing machine and there are only 30000 machine hours available per period, which product should be pushed

  Determine which project has the most risk

On the basis of the information regarding the risk involved in the two projects, you came up with the following probability distributions for the projects: Project A Project B Probability Net Cash Flows ($) Probability Net Cash Flows ($) 0.3 8,100 ..

  What is the meaning of the marginal utitilty

Find the marginal utitlity for each chicken piece. What is the meaning of the marginal utitilty of the 11th piece? If the price of chicken pieces is $1.25 each, how many will you buy? If the price falls to $0.50, how many will you buy? Explain carefu..

  What is evas marginal benefit

Eva runs a small bakery in the village of Roggerli. She is debating whether she should extend her hours of operation. Eva figures that her sales revenue will depend on the number of hours the bakery is open as shown in the table.

  Determine product price

A firm produces a product with a fully allocated average cost equal to $20. If the price elasticity of demand for the product is -5,what should the product price be set at

  Determine how the abatement levels should be reallocated

It is well documented that carbon monoxide (CO) emissions from combustible engines increase in colder climates. This implies that damages are expected to be less severe in summer months than in winter. Nonetheless, air quality control authorities..

  What is his marginal tax rate in percentage terms

The income tax system in a country requires each citizen to pay 10% of income on earnings up to $40,000, and then pay 20% on any earnings over $40,000. If an individual has an income of $69971, then what is his marginal tax rate, in percentage te..

  What will be the depreciation charges

if the cost basis for a macrs 5-year property is $100000 and the equipment is sold for $20000 after 5 years of beneficial use, what will be the depreciation charges the 1st and 5th years and the book value at the end of the 5th year

  What is probability of finding the mean of a daily sample

A truck manufacturer monitors the width of the door seam as vehicles come off its assembly line. the seam width is the distance between the edge of the door and the truck body, in inches. these data are 62 days of measurements of a passenger door ..

  How many popsicles will be sold each day

ADVANCED ANALYSIS Currently, at a price of $1 each, 100 popsicles are sold per day in the perpetually hot town of Rostin. Consider the elasticity of supply. In the short run, a price increase from $1 to $2 is unit-elastic (Es = 1.0). So how many p..

  Why does the autonomous expenditure decreases

how can you explain this is words We can't say consumers are going to save a portion of the 10 taxes because you can't save something that is being taken away from you. Why does the autonomous expenditure decrease by a fraction of the tax in this..

  Calculate the growth rate of zt

Suppose xt = (1:05)t and yt = (1:02)t. Calculate the growth rate of zt in each of the following cases: a) z = xy b) z = x=y c) z = y=x d) z = x^1/2 y^1/2

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd