Please show me the excel equations needed to solve these problems.
The answers are as follows:
1. 33%
2. 0%
3. $60,000
Small Biz 1: Sharon says she has a great idea for a small biz and wants you to invest. You're busy and have no time for any work but have 100k in capital. Sharon only has 20K but thinks combinod, that's enough to start the biz. Sharon says, Thave the company pay me a 40k salary and then well split the profits based on the onginal equity investments. You beliowe if Sharon works VERY hard, the firm will generate 100K in revenue and have TOTAL expenses of 60K. But you also know Sharon runs a tutoring company and if she spends a lot of time doing that, she can make an additional Sk on the side but the firm will generate only 60% in reverve with the same expenses. What is your one year yleld on this investment? (Dofine yleld as Cash fiow you're paid over what you invested and round to the noarest full porcont). Small Biz 2: Shafon says she has a grest idea for a small biz and wants you to invest. You're busy and have no time for any work but have 100k in capital. Sharon only has combined, that's enough to start the biz. Sharon soys, Thave the company pay mo a 40k salary and then woil split the profits based on the original equity investments. You I works VERY hard, the firm will generate 100K in revenue and have TOTAL expenses of 6Ok. But you also know Sharon runs a tusoring company and if she spends a lot of 11 that, she can make an additional 8k on the side but the firm will penerate only 60k in revenue with the same expenses. What is your one year yield on this investment (Define yield as Cash flow youre paid over what you invested and round to the nearest full percent). Small Ba 3: Sijaron says she has a great idea for a small biz and wants you to invest. Youre busy and have no time for any work but have 100k in capital, Sharon only has 20K but thinks combined, thats enough to start the biz. You say you're not interested in an equity contract but wiling to pay $ Sharon 40k a year if the company generales orofits in exchange for a debt contract that pays 20k a year as long as the company operates. You believe if Sharon works VERY hard, the firm will generate ioOk in evenue and have TOTAL expenses of 60K, But you also know Sharon runs a tutoring company and if she spends a lot of time doing that, she can make an additional k on the side but the firm will gonerale only 60k in revenue with the same expenses. How much does Sharon earn in the first year? Dofine yield as Cash flow you're paid over what you invested and round to the nearest full percent). Small 8iz 4: Sharon says she has a great idea for a small biz and wants you to invest. Youre buby and have no time for any work but have 100k in capital, Sharon only has ombined, that's enough to start the biz. You say you're not interested in an equity contract but willing to pay sharon 40K a year if the company generates profits in exchang ontract that pays 20k a year as long as the company operates. You believe it Sharon works VERY hard, the fimm will generate 100k in reverue and have TOTAL expenses Iso know Sharon runs a futoring company and if tho spends a lot of time doing that, she can make an additional 8k on the side but the firm will generate only Gok in reve ame expenses. What is your one year yield on this investment? Dofine yield as Cash flow yourre paid over what you invested and round to the nearest full percent)
