Problem:
Anthony Gray has been interested in music since he was old enough to sit at the piano. He grew up with music and used his talent to earn his way through college. Anthony has now grown tired of his job at a large music house in Houston and is seriously considering moving back to his hometown in Massachusetts to open a small music shop. In researching this venture, Anthony notices that he must include a projected income statement in his loan application.
Suppose a market survey indicates that Anthony's proposed business is likely to generate only $190,000 in sales, and the industry has an 8.9% profit margin. What net profit should Anthony expect to earn?