Business, 05.05.2020 01:47 pollywallythecat

Jacques lives in Denver and runs a business that sells guitars. In an average year, he receives $731,000 from selling guitars. Of this sales revenue, he must pay the manufacturer a wholesale cost of $431,000; he also pays wages and utility bills totaling $259,000. He owns his showroom; if he chooses to rent it out, he will receive $8,000 in rent per year. Assume that the value of this showroom does not depreciate over the year. Also, if Jacques does not operate this guitar business, he can work as an accountant, receive an annual salary of $30,000 with no additional monetary costs, and rent out his showroom at the $8,000 per year rate. No other costs are incurred in running this guitar business.

The rental income Jacques could receive if he chose to rent out his showroom.

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Jacques lives in Denver and runs a business that sells guitars. In an average year, he receives $731...