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? ExpenseAmountRent$10,800Insurance$3,000Store Fixtures$2,700Computer and Cash Register$1,200Inventory$17,400
The total set-up and first-year operating expenses are $35,100. Korey has $8,500 + $25,000 = $33,500 available, so he needs to borrow or attract investors for the remaining $1,600. The percentage is ($1,600 ÷ $35,100) × 100 ≈ 4.6%, so the correct choice is a. 4.6%.
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