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Problem 2 : D & S , Inc. is a small but prosperous hair cutting salon. Dan Stock, the manager of the salon, has been
Problem : D & S Inc. is a small but prosperous hair cutting salon. Dan Stock, the manager of the salon, has been asked by several clients if she will ever offer other "hair related" services eg perm, dye, etc. After careful thought, Dan Stock is considering expanding their offerings. However, in order to do so they will have to hire one additional stylist at a salary of $ per year. Other expenses will increase as follows: rent by supplies and utilities by and miscellaneous expenses by The revenues from additional services are likely to be $ for the next year ie D & Ss income statement for the most recent year is presented below.D & S Inc.Income Statement for the Year Ended December Sales Revenue $ Costs: Labor$ Utilities Supplies Rent Miscellaneous Manager's Salary Operating Profits $ a Based on your financial analysis, should Dan Stock go ahead with the expansion?b What other factors must Dan Stock consider before making a final decision?
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