please show all work 8.4 A small consulting engineering company bought an office
ID: 1099499 • Letter: P
Question
please show all work
8.4 A small consulting engineering company bought an office building for $900,000. The company has ten engineers and eight support staff. Monthly expenses for salaries, utilities, grounds mainte- nance, etc. are $1.1 million. If the average billing rate per engineer is $90 per hour, how many hours per month must be billed in order for the company to make a profit of $15,000 per month? Use an interest rate of 1% per month and assume the building will have a market value of $1.5 million after 10 years.Explanation / Answer
Monthly payout of FV of office and payment of PV of office were calculated using PMT formula in excel.
Monthly cost of office = Monthly payout of FV of office - Monthly payment of PV of office
Monthly revenue that is need to get a profit of $15000 = $15000 + $1.1M + monthly cost of office.
Life of office 10 Value of office $ 900,000.00 Future Value of office after 10 yrs $ 1,500,000.00 Monthly payout of FV of office $ 6,520.64 Monthly payment of PV of office $ (12,912.39) Monthly cost of office $ (6,391.74) Monthly expense $ (1,100,000.00) Monthly profit $ 15,000.00 Monthly revenue $ 1,121,391.74 Monthly hours billed 12460Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.