Jamie has a business taking care of horses. It is not an easy business to run as she runs around the area, picking up and dropping off animals all day. To help care for the horses, Jamie has hired a part-time helper at her farm- she pays him an hourly rate. This works best as the hours tend to vary depending on how much Jamie is on the road any given day.

Last year, Jamies income statement looked like this:

Jamies Ponies Income Statement

For the year ended December 31, 202X

Service Revenue $91,000

Variable Expenses 28,000

Contribution Margin 63,000

Fixed Expenses 10,000

Net Income $53,000

This year, Jamie is expecting her service revenues to grow by 5%, and her variable expenses proportionally. She has an option to rent full-service stables which would cost her an additional $20,000 a year.

However, her variable expenses from last year would shrink by 60% (no impact on revenues which would still grow 5%).

Prepare a brief ppt presentation for Jamie, detailing what she should do and what her projected numbers for next year will look like. Communicate to her in understandable language but provide her all the details she needs. Be sure to include explanations about variable and fixed expenses!