Calculating costs

Ginny is working for a marketing firm making $50,000 per year but considers starting her own marketing company. Ginny has determined that to launch the business, she needs to invest $80,000 of her own funds. The annual cost of running the business will include $60,000 for the rent of the office space, $200,000 for employee wages, and $7,000 for materials and utilities. Ginny plans to manage the business, which means that she will have to quit her current job. Suppose that the interest rate (or rate of return) on investments in the economy is 5%.