Maryann and Don Want to Open Their Own Deli

question 5

Multiple Choice

Maryann and Don want to open their own deli.To do so, Maryann must give up her job, at which she earns $20, 000 per year, and Don must give up his part-time job, at which he earns $10, 000 per year.They must liquidate their money market fund, which earns $1, 000 interest annually.The rent on the building is $10, 000 per year, and expenses for such necessities as utilities, corned beef, and pickles are $35, 000 annually.What minimum amount of revenue per year would make it worthwhile, financially, for Maryann and Don to operate the deli?

• A)$10, 000
• B)$35, 000
• C)$45, 000
• D)$31, 000
• E)$76, 000

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Definitions:

External Parties

Individuals or entities that are not part of a firm but are interested in its financial information, such as investors, creditors, or regulatory agencies.

Parent Company

A company that holds a controlling interest in other companies, known as subsidiaries, by owning more than half of their stock or having the power to control their operations.

Share Capital

The amount of money that a company raises through the issuance of shares to shareholders, representing the equity funding of the company.

Fair Value

The price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants.