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. If Korey doesn’t make any changes to his initial expenses, what percent of the total set-up and operation expense will have to be funded through loans or investors?

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

a.
4.6%
b.
9.5%
c.
45.6%
d.
95.4%


Please select the best answer from the choices provided

A
B
C
D
Mark this and return

Answer 1

Total expenses = 10,800 + 3,000 + 2,700 + 1,200 + 17,400 = $35,100.
Available funds = 8,500 + 25,000 = $33,500.
Needed = 35,100 − 33,500 = $1,600.
Percent = 1,600 / 35,100 ≈ 0.0456 ≈ 4.6%.

Answer: A (4.6%).