Rustic Interiors, an interior design company, has experienced a drop in business due to an increase in interest rates and a corresponding slowdown in remodeling projects. To stimulate business, the company is considering exhibiting at the Middleton Home and Garden Expo. The exhibit will cost the company $13,000 for space. At the show, Rustic Interiors will present a slide show on a PC, pass out brochures that were printed previously (the company printed more than needed), and show its portfolio of previous jobs.

The company estimates that revenue will increase by $40,000 over the next year as a result of the exhibit For the previous year, profit was as follows’

Required

Calculate the impact of the exhibit on company profit. Should the company exhibit at the home show?

$210,000 Revenue Less: Design supplies Salary of Samantha Spade (owner) Salary of Kim Bridesdale (full-time employee) $16,000 82,000 56,000 19,000 7,000 4,000 800 3,000 2,500 Rent Utilities Depreciation of office equipment Printing of advertising materials Advertising in Middleton Journal Travel expenses other than depreciation of autos Depreciation of company cars Net income 10,000 200,300 $ 9,700