Arturo Garcia and Marcela Melendez are partners in Family Dental Center. They share equally the income and the costs of office rent, utilities, insur ance, and salaries for the four people who work for them. You just graduated from dental school. Arturo and Marcela offer you a partnership in their practice. Since you lack their years of experience, they offer

Arturo Garcia and Marcela Melendez are partners in Family Dental Center. They share equally the income and the costs of office rent, utilities, insur ance, and salaries for the four people who work for them.

You just graduated from dental school. Arturo and Marcela offer you a partnership in their practice. Since you lack their years of experience, they offer you a 20 percent interest in return for a $40,000 investment.

INSTRUCTIONS

1. Assume that the revenue for the dental practice averages $10,000 a week. If you become a partner, you could generate additional revenue of $3,500 a week. Compute your 20 percent share of the income.

2. Compute your share of the expenses if total weekly expenses are $6,000.

3. Do you think that the 20% interest return in the partnership is a good deal? Would you negotiate a different arrangement? Explain.

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