Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

You make Fidget Spinners that you can sell for $6.50 each. The materials that go into each fidget spinner include ball bearings ($1.25/unit), and plastic

You make Fidget Spinners that you can sell for $6.50 each. The materials that go into each fidget spinner include ball bearings ($1.25/unit), and plastic ($0.15/unit). Your other costs are as follows:

$0.10/unit of injection molding costs

You pay your little brother 5% commission on each unit he sells.

$100 per month for a social media advertising campaign

$3600 per year that your parents are charging you to use the garage

$3000/month to cover the salaries for you and two of your best friends who are all equal partners in this business.

Because you are using the garage, you are also required to purchase car covers upfront for each of your parents cars. This totals $750. You also need to purchase injection molds for $1500.

Your parents have offered to loan you and your two friends $4000 interest free (nice parents) to get this business started so that you can purchase all the necessary upfront equipment and your first batch of parts. Your first (and only) year projections show expected sales to be as follows. After the year, you and your friends will split any profit and use it to pay for college.

Month 1: 500 units

Month 2: 1000 units

Months 3-12: 1250 units per month

In what month will you and your friends have enough profit to pay back your parents for the $4000 loan?

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Chains Of Finance How Investment Management Is Shaped

Authors: Diane-Laure Arjalies, Philip Grant, Iain Hardie, Donald MacKenzie, Ekaterina Svetlova

1st Edition

0198802943, 978-0198802945

More Books

Students also viewed these Finance questions

Question

Factors Affecting Conflict

Answered: 1 week ago

Question

Describe the factors that lead to productive conflict

Answered: 1 week ago

Question

Understanding Conflict Conflict Triggers

Answered: 1 week ago