The investors of Smith Autos have put up $500,000 to construct a building and purchase all equipment required to wash cars. The investors expect to earn a minimum return of 10% on their investment. If the money to set up the business had been borrowed from a bank instead, the car wash owners would have paid a 10% interest rate. The car wash is open 50 weeks per year and washes 800 cars per week. Whether operative or not, the company must pay $1,000 per week return to investors and $1,000 per week as insurance. The variable costs for the 800 weekly washes includes $1,000 labour cost and $600 materials cost. There are many car washes of equal quality and service in the area and they charge $5 per car wash. 1. Graphically represent the company’s performance, showing profit or loss.

The investors of Smith Autos have put up $500,000 to construct a
building and purchase all equipment required to wash cars. The
investors expect to earn a minimum return of 10% on their
investment. If the money to set up the business had been borrowed
from a bank instead, the car wash owners would have paid a 10%
interest rate. The car wash is open 50 weeks per year and washes 800
cars per week. Whether operative or not, the company must pay $1,000
per week return to investors and $1,000 per week as insurance. The
variable costs for the 800 weekly washes includes $1,000 labour cost
and $600 materials cost. There are many car washes of equal quality
and service in the area and they charge $5 per car wash.

1.  Graphically represent the company’s performance, showing profit
or loss.