Question
Stats for 3 Chips: (Only from what we know from video) Original Term: $300,000 for 15% Equity Jim's Term: $300,000 for 50% Equity Company Value:
Stats for 3 Chips: (Only from what we know from video) Original Term: $300,000 for 15% Equity Jim's Term: $300,000 for 50% Equity Company Value: 2,000,000 (According to Seller) 600,000 (According to Jim) Net Sales: $850,000 (460,000 on Apple) Expenses: 35% of Sales or $297,500 yearly (without promotions) 50 to 55% of Sales or $425,000 to 467,500 yearly (Including Promotion) Gross Margin: 65% - $552,500 yearly (Does not include marketing expense) *Note: Gross Margin is Net Sales minus Cost of Goods Sold, As Promotion expense is not part of COGS it makes sense not to include it but it might be misleading Promotion cost: 15 to 20% on Promotion or $127,500 or 170,000 yearly Taxable Income: $425,000 or $382,500 year *Note: Taxable Income is less than $500,000, It qualifies for small business deduction (Lower tax rate) Taxes in 2013: 4.5% Provincial (Ontario) and 11% Federal 15.5% Combined, $65,875 or 43,987.50 Net Income: $359,125 or 338,512.5 Question 1: Find the Return on Equity of the original term Question 2: What is the Return on Equity of Jim's term
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started