Question

Jim Martin owns a men's clothing store in Philadelphia. He was recently offered the position of...

Jim Martin owns a men's clothing store in Philadelphia. He was recently offered the position of store manager at Anthony's, a large retail chain store in the area. Working at Anthony's, Jim would earn an annual salary of $50,000. Jim knows that he could sell the net assets of his business for $115,000, but is uncertain whether to sell the business and manage Anthony's or continue operating his own store. Jim begins his analysis of the two alternatives by examining his store's income statement from last year. What should he do?

Revenue..$225,000
Cost of goods sold...135,000
Rent...7,200
Employee wages...17,000
Utilities...3,640
Supplies...560
Advertising...1,450
Professional fees...1,150
Insurance...820
Miscellaneous expenses...630

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Answer #1

Analysis of John Business Result :

Particulars Amount

Revenue $ 225,000

Less : Cost of goods sold 135,000

Rent 7,200

Employee Wages 17,000

Utilities 3,640

Supplies 560

Advertising 1,450

Professional Fee 1,150

Insurance 820

Misc. Expenses 630

$167,450

Profit    $57,550

From the Employment will get Salary $ 50,000.

Conclusion : From the above analysis carrying his business is more beneficial than the employment.

   

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