Ballet Company Finance

Martha currently performs for a ballet company that pays her a salary of $30,000 a year. She is considering quitting this job and opening her own dance company. She estimates the annual revenues from the company will be $95,000 and the total annual expenses for operating the company, ignoring payments to Martha, will be $75,000. Martha's accountant friend advises her to start her own company because it will be a profitable enterprise. Do you agree with the accountant? Why or Why not?

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