You are curious as to how much Rhonda and Steve made in their business last year. You do not have all the data, but you know that most of their expenses relate to buying the sweaters and having them monogrammed.

You know they paid themselves $50,000 each and you know the rent, utilities, insurance, and a benefit package for the business was about

$20,000. About how much do you think they made “before taxes” last year?

If they must make their payment to the venture capital firm, and then pay 50 percent in taxes, what was their increase in cash last year?1002W