In 2016, x, an entrepreneur, came up with a gadget which can make air conditioners temporarily functional even without electricity. Using his invention, air conditioners can be plugged to his gadget, which in turn is attached to an ordinary car battery. This allows the cooling appliance to work for one hundred hours without electricity.

Brief History

After graduating in 1995 with a degree in Engineering, X was employed in a company specializing in refrigeration. The young graduate learned much about the business while contributing a novelty idea (electric fans using conventional transistor batteries; dual source with electricity as the main power source). The company, however, did not pursue his ideas, prompting him to set up his own business in 2005.

In the next 10 years, his company sold modest volume of the new product, but the sales generation did not satisfy him as the company experienced a little higher than breakeven sales. His company had realized not profits but well below his expectations (see table below)

TABLE 1.2 FOUR YEAR INCOME STATEMENT OF THE COMPANY (VALUES IN '000 PESOS} 2017 2018 2019 SALES COST OF GOODS SOLD GROSS PROFIT OPERATING EXPENSES OPERATING INCOME TAX 30% NET INCOM E AFTER TAX 245 224 175 231 TABLE 1.1 5 YEAR INCOME STATEMENT OF THE COMPANY (VALUES IN '000 PESDS} 2011 2012 2013 2014 2015 SALES 2,000 2,200 2,300 2,100 2,300 COST OF GOODS SOLD 1,400 1,540 1,610 1,420 1,610 GROSS PROFIT 500 590 OPERATING EXPENSES 400 500 OPERATING INCOME 200 190 TAX 30% 50 57 NET INCOME AFTER TAX 140 133