Calculate what the break-even would be for the case given the following information:
Case: A Consulting Firm
The facts (in no particular order):
You have one manager on staff
You have one assistant on staff
Each consulting project earns you $40,000 in revenue
You pay sales people a 15% commission and all of your projects are sold by sales people
For each project you must pay an independent consultant $10,000 to perform the work for that project
Your manager (the one that works for you full time) costs you $130,000 per year
Your assistant (the one that works for you full time) costs you $50,000 per year
You pay $2,000 per month in rent
Assume no other expenses or revenue (e.g., no taxes)
How many consulting projects do you need to sell and complete each year to break even (round up to the nearest whole number, most people do not pay for a job partially done)?