New engraver cost: $25,000
One-year loan cost: 12% interest
Revenue per day from engraving: $975
Profit margin on engraving: 25%
Potential days lost, if engraver breaks: 18
1. What is the total net profit lost if the The local bank will loan Charlie $25,000 for 1 year at an interest rate of 12% with only one payment due at the end of the year. If Charlie borrows the full $25,000 for the new engraver, what will the total cost of the loan be?
2. Calculate the total amount of revenue (gross profit) that will be lost if the engraver breaks.
3. If the engraving business makes $975 per day in revenue and generates a net profit of 25%, how much profit is generated per day?
4. engraver is out of commission for the full 18 days?
5. If the engraver is kept busy 269 full days per year, how much revenue (gross profit) will be generated?
6. If the engraver is kept busy 269 full days per year, how much net profit will be generated?
7. Given a 25% profit margin and $975 per day in revenue, how many days would it take for the new engraver to earn back the total cost of purchase, if the entire net profit were allocated to pay for the unit? Round your answer to the next full day.