Question

Korey is planning to open a comic book store. He has developed the following expense breakdown for set-up and operation for the first year. Korey has $8,500 in savings and $25,000 in inheritance money to use to open his store. Will Korey have enough to run his business for a full year?

Expense
Amount
Rent
$10,800
Insurance
$3,000
Store Fixtures
$2,700
Computer and Cash Register
$1,200
Inventory
$17,400

a.
Yes, Korey will have $1,600 to spare.
b.
No, Korey will be short $1,600.
c.
Yes, Korey will have $15,800 to spare.
d.
No, Korey will be short $15,800.

Answer 1

Total expenses = 10,800 + 3,000 + 2,700 + 1,200 + 17,400 = 35,100.
Korey has 8,500 + 25,000 = 33,500.
33,500 − 35,100 = −1,600, so he is short $1,600.

Answer: b.