Question
Kenji lives in San Francisco and operates a small company selling scooters. On average, he receives $702,000 per year from selling scooters. Out of this
Kenji lives in San Francisco and operates a small company selling scooters. On average, he receives $702,000 per year from selling scooters. Out of this revenue from sales, he must pay the manufacturer a wholesale cost of $402,000. He also pays several utility companies, as well as his employees wages totaling $279,000. He owns the building that houses his storefront; if he choose to rent it out, he would receive a yearly amount of $8,000 in rent. Assume there is no depreciation in the value of his property over the year. Further, if Kenji does not operate the scooter business, he can work as a programmer and earn a yearly salary of $20,000 with no additional monetary costs, and rent out his storefront at the $8,000 per year rate. There are no other costs faced by Kenji in running this scooter company.
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