After working for 25 years as personal fitness trainers while raising their kids, three sisters cashed in
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After working for 25 years as personal fitness trainers while raising their kids, three sisters cashed in a total of $120,000 in bonds and decided to open a small, neighborhood fitness center. They spent the $120,000 on exercise equipment, advertising, computer equipment, and other furnishings for the business. For the next 3 years, they took in $150,000 in revenue each year, paid themselves $30,000 annually each and rented a space in a strip mall for $36,000 per year. Before the investment, their $120,000 in bonds were earning interest at a rate of 8 percent. Are they now earning economic profits? Explain your answer.
Related Book For
Canadian Income Taxation planning and decision making
ISBN: 9781259094330
17th edition 2014-2015 version
Authors: Joan Kitunen, William Buckwold
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