Wanda Weeks Is Tired of Running Her Small Machine Tool

question 30

Essay

Wanda Weeks is tired of running her small machine tool company.She wishes to sell it in order to use her time and money elsewhere.She is currently earning a salary of $85,000 per year and a 10 percent return on her capital investment.She wants to take a job in a bank and invest her capital in a mutual fund.What issues should she look at before making the decision to change careers?

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Definitions:

Par Value

The nominal or face value of a bond, stock, or coupon as stated by the issuer.

Legal Capital

The minimum amount of capital that a company must maintain as required by law, often to protect creditors.

Assigned

Attributed or designated to a particular task, resource, or responsibility within an organization or process.

Cash Dividend

A payment made by a company out of its earnings to its shareholders, typically in the form of cash.