After recently graduating from college, you have decided to start a new business. You and several of your friends have decided to sell customized jewelry to wholesalers and directly to customers via an online web portal. You, along with 4 of your friends will each have to contribute $10,000 in initial capital to pay for the jewelry manufacturing, website design and hosting. The total amount of upfront capital is $50,000. The jewelry products are in high demand and are expected to sell with a large profit margin. Your team anticipates making a profit of $200,000 in its first year.
The recommended form of business organization is a limited liability parternship (LLP). An LLP has the benefits of limited liability and ease of formation. The LLP is recommended over other forms such as a partnership and company because partnerships do not have limited liability, whereas companies are complex to form and cumbersome due to regulatory requirements.
The organization should be managed by the principals because it is a new business, and the investors are also new to the business. Management by agents has the potential of poor management, mismanagement or fraud as it is a high profit margin business.
After recently graduating from college, you have decided to start a new business. You and several...
After recently graduating from college, you have decided to start a new business. You and several of your friends have decided to sell customized jewelry to wholesalers and directly to customers via an online web portal. You, along with 4 of your friends will each have to contribute $10,000 in initial capital to pay for the jewelry manufacturing, website design and hosting. The total amount of upfront capital is $50,000. The jewelry products are in high demand and are expected...
You are graduating from college at the end of this semester and after reading the Business of Life box in this chapter, you have decided to invest $4300 at the end of each year into a Roth IRA for the next 46 years. If you earn 9 percent compounded annually on your investment, how much will you have when you retire in 46 years? How much will yoi have if you wait 10 years before beginning to save and only...
You are graduating from college at the end of this semester and after reading the The Business of Life box in this chapter, you have decided to invest $4,700 at the end of each year into a Roth IRA for the next 42 years. If you earn 6 percent compounded annually on your investment, how much will you have when you retire in 42 years? How much will you have if you wait 10 years before beginning to save and...
You are graduating from college at the end of this semester and have decided to invest $5,000 at the end of each year into a Roth IRA for the next 30 years. If you earn 6% compounded annually on your investment of $5,000 at the end of each year, how much will you have when you retire in 30 years? How much will you have if you wait 10 years before beginning to save and only make 20 payments into...
You are graduating from college at the end of this semester and after reading the The Business of Life box in this chapter, you have decided to invest %5,100 at the end of each year into a Roth IRA for the next 40 years. If you earn 10 percent compounded annually on your investment, how much will you have when you retire in 40 years? How much will you have if you wait 10 years before beginning to save and...
(Future value of an ordinary annuity) You are graduating from college at the end of this semester and after reading the The Business of Life box in this chapter, you have decided to invest $4,500 at the end of each year into a Roth IRA for the next 46 years. If you earn 6 percent compounded annually on your investment, how much will you have when you retire in 46 years? How much will you have if you wait 10...
You have decided to start a vending machine business. A local store has space available for your machine but wants to charge you an annual fee to use the space. You estimate that you can sell 5,000 cans of soda each year. You sell a can of soda for $1.25, which allows you a profit of $0.50 per can. What is the most you would spend to lease the space for one year?
You would like to start a business and have decided to move back into your parents’ basement as you save up the $50,000 you will need in starter costs. You procure a job that will allow you to contribute $550 into a savings account semi monthly (24 times a year). The account will be compounded at that same interval and will earn an annual interest rate of 3.259%. The instrument only allows you to collect at the end of complete...
Suppose you have decided to start a small business selling snacks from vending machines. You have secured a location for one candy vending machine in a local bookstore. Rental for the space will cost $200 per month. Vending machines can be purchased at wholesale clubs such as Sam’s Club and Costco. You can also purchase the snacks to stock the machines in bulk there. 1. Either visit a local warehouse club or review its website to determine the initial cost...
Suppose you have decided to start a small business selling snacks from vending machines. You have secured a location for one candy vending machine in a local bookstore. Rental for the space will cost $200 per month. Vending machines can be purchased at wholesale clubs such as Sam’s Club and Costco. You can also purchase the snacks to stock the machines in bulk there. 1. Either visit a local warehouse club or review its website to determine the initial cost...