Question

You have purchased a car wash franchise. The franchise fee was $20,000. You must pay 6 percent of your earnings in royalty fees. In your first year, you paid $10,000 for equipment, $4,300 for operating costs, and $10,700 for part-time employees.

Your first-year revenues were $120,000.

Calculate the total expendtures for the first year. What was your profit? What will profits be in your second year if total revenues and costs remain the same?