Mr. ABC wanted to start a new business in men’s Formal wears. He had contacted the manufacture in Italy. The manufacture can supply the Shirt, Coats, Pants & tie at Net cost of $20, $25, $15, $10 respectively at Lahore port including all duties. (1 USD = XXX PKR). The same can be sold with the profit margin of 19%. For his shop, he had two alternatives (a) Main liberty market and (b) Model Town Link road. In order to run the shop Mr. ABC required services of two sales persons & helper having yearly salary as 500,000 Rs and 250,000 Rs respectively. Annual Salary increment is set @ 10%. Plus, commission is equally divided amongst sales person and helper @1% of sales. Yearly average utility and miscellaneous bill is 1,000,000 Rs (Expected increase per year 8%) for both locations. Furthermore, you had decided to take 1,900,000 per annum for your home and personal expense having in mind to get increased in earning @ 17 percent per annum. In order to run your business, He had made agreement with local bank of loan of 10 Million at (KIBOR +4.75) % interest
