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Analysis of Cash Flow for a Small BusinessCharles,

Analysis of Cash Flow for a Small BusinessCharles, a financial consultant, has been self-employed for two years. His list of clients hasgrown, and he is earning a reputation as a shrewd investor. Charles rents a small office, uses thepool secretarial services, and has purchased a car that he is depreciating over three years. The followingincome statements cover Charles’s first two years of business:Charles believes that he should earn more than $11,500 for working very hard for two years. He is thinking about going to work for an investment firm where he can earn $40,000 per year. What would you advise Charles to do?

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