The contract price will be received in four equal instalments on the last day of the last month of each quarter. The rate of inflation is 2% per annum and the

quarterly bank interest rate is 1%. X cleaners will be employed during the first quarter rising to (X+4) in the second, third and fourth quarters. Their rate of pay is £Y.YY per hour during the first quarter rising by £0.25 each quarter (final quarter’s pay is therefore £Y.YY+0.75) Each cleaner will work for 15 hours per week (13 weeks per quarter) and will receive a Christmas bonus of £300 each. In addition to the above, two part-time supervisors will be employed from 1 January on a starting gross annual salary of £15,000 each. They are to receive a 10% salary increase at the start of the final quarter. Ten cleaning machines costing £Z each will be required at the start of the contract. After six months, a further two more machines will be needed. The rate of inflation for the machines is 5% per quarter. Isla is to depreciate the machines at 50% per annum in her accounts. A motor vehicle is to be rented/hired at £275 per month from the start of the contract. Isla wants to make a profit of at least £12,000 per annum on the contract to cover her time. £2,000 is to be introduced into the business at the start of the contract by Isla. Ignore VAT, Income tax and National Insurance. Isla has asked you to use your knowledge and experience (common sense !!) to include estimates for the other overheads expected to be incurred in a contract of this nature e.g. machine maintenance, motor expenses etc. etc.