suppose natasha currently makes $50,000 per year working as a manager at a cable

Question

suppose natasha currently makes $50,000 per year working as a manager at a cable tv company. In one she will quit her job to start an organic soap company. In the other she will try to develop an internet-based competitor to the local cable company. For the soap making opportunity she anticipates annual revenue of $465,000 and costs for the necessary land, labor and capitol of 395,000 per year. For the internet opportunity she anticipates costs for land labor and capitol of$ 3,250,000 per year as compared to revenues of $3,275,000 per year. Should she quit her current job to become an entrepreneur? If she does not quit her current job which opportunity would she pursue?

Explanation / Answer

Hi,

Please find the answer as follows:

Part 1:

Yes, Natasha quit her current job to become an entreprenuer.

Part 2:

Natasha should pursue the Soap Business.

Explanation:

It is so because the net revenue of 70000 (465000 - 395000) generated from the soap business exceeds Natasha's current wage and also the net revenue of 25000 (3275000 - 3250000) generated from the internet business.

Thanks.

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