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Friday, June 08, 2012 3:49:56 PM
I was giving the "deal" some further thought while my wife and I were visiting doctors today. MP got $250,000 up front. The 10% would be paid on net income each year.
Figuring 5% net profit as an average for many, many companies in U.S. X 10% = .005.
$250,000 divided by .005 = $50,000,000 in sales divided by average price per unit of say $25.00 = 2,000,000 units needed to be sold by supplier to break even on the $250,000 given up front.
On the face it's not a bad deal for MP in the short term, but long term the jury is out.
(Bean counters please double check my figures....thanks)
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