2. Suppose Natasha currently makes $50,000.00 per year working as a manager at a

Question

2. Suppose Natasha currently makes $50,000.00 per year working as a manager at a cable TV company. She then develops two possiable entrepreneurial business opportunities. 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 capital of $395,000 per year. For the Internet opportunity, she anticipates costs for land, labor and capital of $3,250,000 per year as compared to revenues of $3,725,000 per year. a) Should she quit her current job to become an entreprenuer? b) If she does quit her current job , which opportunity would she pursue?

Explanation / Answer

yes and will try to develop an Internet-based competitor to the local cable company.. profit=3725000-3250000=475000 per year..therefore she quits..

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