An accounting professor is considering opening his own consulting firm. To do so, she will have to quit her current job, that pays $125,000 a year, and take over a building that she owns and currently rents to her friend for $15,000 a year. Additionally, she will have to withdraw $50,000 from her savings, that pays 5 percent per year. Her expenses at the firm have been estimated as follows: $80,000 for employee salaries, $6,000 for insurance, $5,000 for utilities, and $9,000 for supplies. She anticipates annual revenues of $250,000. Determine:

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codiepienagoya codiepienagoya · Answer 1 · 2021-02-04T06:28:21+01:00

Answer:

The answer is "$100,000"

Explanation:

Please find the complete question in the attached file.

Given value:

[tex]\text{Employees salary}= \$ 80,000\\\\\text{Insurance}= \$ 6,000\\\\\text{Utility cost}=\$ 5,000\\\\\text{Supplies}= \$ 9,000[/tex]

[tex]\text{Annual Explicit costs}= ?[/tex]

Formula:

[tex]\text{Annual Explicit costs}= \bold{\text{Employees salary}+ \text{Insurance}+ \text{Utility cost}+ \text{Supplies}}[/tex]

[tex]= \$ 80,000 + \$ 6,000 + \$ 5,000 + \$ 9,000\\\\= \$ 80,000 + \$ 20,000\\\\= \$ 100,000[/tex]