You leave your $50,000 a year job and invest your savings of $40,000 (on which you...
You leave your $50,000 a year job and invest your savings of $40,000 (on which you were earning 10 percent annual interest) to start your own business. In the first year, your business generated $100,000 in total revenue and had to pay $40,000 in explicit costs. The economic profit generated by this gym was
| a. |
greater than your accounting profit because economic profit is always greater than accounting profit. |
|
| b. |
$6,000 |
|
| c. |
$10,000 |
|
| d. |
$60,000 |
Homework Answers
Answer
Accounting profit =total revenue - explicit costs
=100000-40000
=60000
Economic profit =accountig profit - implicit costs
implict costs = salary of the best alternative =the job left
=$50000
Interest on the investments =40000*0.1=$4000
Total implicit costs =50000+4000=54000
Economic profit =60000-54000
=$6000
the economic profit is $6000
Option b
Add Answer to:
You leave your $50,000 a year job and invest your savings of
$40,000 (on which you...
Jim resigns from his job, from which he was earning $40,000 per year, and then uses...
Jim resigns from his job, from which he was earning $40,000 per year, and then uses his own savings as the only source of capital to start a new firm. In the first year, his revenue is $120,000 and the total explicit cost is $60,000. Jim does not want to reveal how much own-savings he uses in his business, but implies that if the interest rate was higher than 5%, he would prefer not to start his own business. Refer...
Case 2 Jim resigns from his job, from which he was earning $40,000 per year, and...
Case 2 Jim resigns from his job, from which he was earning $40,000 per year, and then uses his own savings as the only source of capital to start a new firm. In the first year, his revenue is $120,000 and the total explicit cost is $60,000. Jim does not want to reveal how much own- savings he uses in his business, but implies that if the interest rate was higher than 5%, he would prefer not to start his...
D Question 8 1 pts Case 2 Jim resigns from his job, from which he was earning $40,000 per year, and then uses his o...
D Question 8 1 pts Case 2 Jim resigns from his job, from which he was earning $40,000 per year, and then uses his own savings as the only source of capital to start a new firm. In the first year, his revenue is $120.000 and the total explicit cost is $60,000. Jim does not want to reveal how much own-savings he uses in his business, but implies that if the interest rate was higher than 5%, he would prefer...
Zippy is earning $40,000 per year working for Joe's Car Repair. He also has savings of...
Zippy is earning $40,000 per year working for Joe's Car Repair. He also has savings of $150,000, on which he is eaming 10% annual interest. He decides to leave Joe's Car Repair to invest his savings in starting his own car repair business In the first year, Zippy's Speedy Car Repair cars revenues of $250,000 and has explicit costs of $150,000 Zippy's economic profit (or loss) in the first year is $ (Round your answer to the nearest dolor.)
I took 120,000-60,000 = 60,000 Acct Profit 40,000 + .05X = 60,000 where X = Savings Solved for X, I got 400,000 Is this...
I took 120,000-60,000 = 60,000 Acct Profit
40,000 + .05X = 60,000 where X = Savings
Solved for X, I got 400,000
Is this right? If not, please show me how to do it correctly
Case 2 Jim resigns from his job, from which he was earning $40,000 per year, and then uses his own savings as the only source of capital to start a new firm. In the first year, his revenue is $120,000 and the total explicit cost...
Zippy is earning $30,000 per year working for Joe's Car Repair. He also has savings of...
Zippy is earning $30,000 per year working for Joe's Car Repair. He also has savings of $100,000, on which he is earning 10% annual interest. He decides to leave Joe's Car Repair to invest his savings in starting his own car repair business. In the first year, Zippy's Speedy Car Repair earns revenues of $200,000 and has explicit costs of $75,000 Zippy's economic profit (or loss) in the first year is S. (Round your answer to the nearest dollar.)
6. Peggy-Sue loves to bake cookies and recently left her job at Cookie Monster, Inc., (making...
6. Peggy-Sue loves to bake cookies and recently left her job at Cookie Monster, Inc., (making $125,000 per year) to start her own cookie-baking business. Her annual costs would include $40,000 for labor, $10,000 for rent, $35,000 for ingredients, and $5,000 for utilities. She withdrew $100,000 of her own savings to invest in the operation, which had been earning 10 percent interest per year. a. List Peggy-Sue’s total costs of operating her own cookie business, and specifically indicate which items...
4. Suppose that last year you started your own brewery. You had $90,000 in explicit costs, which included the wages you...
4. Suppose that last year you started your own brewery. You had $90,000 in explicit costs, which included the wages you paid your employees and the costs associated with the purchase of the ingredients that went into making your beer. You also incurred $61,000 in implicit costs, which included the $50,000 salary ou were earning before you left your previous job to start the brewery business. Over the course of the year, you sold 20,000 bottles of beer at an...
Karen is offered a job with a salary of $70,000, which she turns down to start...
Karen is offered a job with a salary of $70,000, which she turns down to start her own business. She uses $20,000 of her own savings to help start the business, savings that had been providing her a return of $1,000 per year. Over her first year in business, Karen collects total revenue of $180,000 and must cover explicit costs of $105,000. During her first year in business, Karen's accounting profit is _____, and her economic profit is _____.
1. Peggy-Sue loves to bake cookies and recently left her job at Cookie Monster, Inc., (making...
1. Peggy-Sue loves to bake cookies and recently left her job at Cookie Monster, Inc., (making $125,000 per year) to start her own cookie-baking business. Her annual costs would include $40,000 for labor, $10,000 for rent, $35,000 for ingredients, and $5,000 for utilities. She withdrew $100,000 of her own savings to invest in the operation, which had been earning 10 percent interest per year. List Peggy-Sue’s total costs of operating her own cookie business, and specifically indicate which items are...
Jim resigns from his job, from which he was earning $40,000 per year, and then uses his own savings as the only source of capital to start a new firm. In the first year, his revenue is $120,000 and the total explicit cost is $60,000. Jim does not want to reveal how much own-savings he uses in his business, but implies that if the interest rate was higher than 5%, he would prefer not to start his own business. Refer...
Case 2 Jim resigns from his job, from which he was earning $40,000 per year, and then uses his own savings as the only source of capital to start a new firm. In the first year, his revenue is $120,000 and the total explicit cost is $60,000. Jim does not want to reveal how much own- savings he uses in his business, but implies that if the interest rate was higher than 5%, he would prefer not to start his...
D Question 8 1 pts Case 2 Jim resigns from his job, from which he was earning $40,000 per year, and then uses his own savings as the only source of capital to start a new firm. In the first year, his revenue is $120.000 and the total explicit cost is $60,000. Jim does not want to reveal how much own-savings he uses in his business, but implies that if the interest rate was higher than 5%, he would prefer...
Zippy is earning $40,000 per year working for Joe's Car Repair. He also has savings of $150,000, on which he is eaming 10% annual interest. He decides to leave Joe's Car Repair to invest his savings in starting his own car repair business In the first year, Zippy's Speedy Car Repair cars revenues of $250,000 and has explicit costs of $150,000 Zippy's economic profit (or loss) in the first year is $ (Round your answer to the nearest dolor.)
I took 120,000-60,000 = 60,000 Acct Profit
40,000 + .05X = 60,000 where X = Savings
Solved for X, I got 400,000
Is this right? If not, please show me how to do it correctly
Case 2 Jim resigns from his job, from which he was earning $40,000 per year, and then uses his own savings as the only source of capital to start a new firm. In the first year, his revenue is $120,000 and the total explicit cost...
Zippy is earning $30,000 per year working for Joe's Car Repair. He also has savings of $100,000, on which he is earning 10% annual interest. He decides to leave Joe's Car Repair to invest his savings in starting his own car repair business. In the first year, Zippy's Speedy Car Repair earns revenues of $200,000 and has explicit costs of $75,000 Zippy's economic profit (or loss) in the first year is S. (Round your answer to the nearest dollar.)
4. Suppose that last year you started your own brewery. You had $90,000 in explicit costs, which included the wages you paid your employees and the costs associated with the purchase of the ingredients that went into making your beer. You also incurred $61,000 in implicit costs, which included the $50,000 salary ou were earning before you left your previous job to start the brewery business. Over the course of the year, you sold 20,000 bottles of beer at an...
Most questions answered within 3 hours.
-
Where is the error in this code sequence?
String s1 = "Hello";
String s2 = "ello";...
asked 11 months ago -
Financial data for Joel de Paris, Inc., for last year
follow:
Joel de Paris, Inc.
Balance...
asked 11 months ago -
Consider this reaction:
Al2(SO4)3 (aq)+ BaCl3
(aq) Al2Cl6 (aq)- +
3BaSO4(s) . What is the...
asked 11 months ago -
Suppose that Savneet is considering increasing her
recent random sample from 20 car rentals to 40...
asked 11 months ago -
Trucks arrive at an unloading terminal at an average rate of 120
per hour.
Trucks arrive...
asked 11 months ago -
Why are methanol and ethanol completely soluble in water while
octanol is not very little soluble....
asked 11 months ago -
A facilities manager at a university reads in a research report
that the mean amount of...
asked 11 months ago -
When the CuSO4 is rehydrated by adding water to the anhydrous
compound, is this an endothermic...
asked 11 months ago -
A ray of sunlight is passing from diamond into crown glass; the
angle of incidence is...
asked 11 months ago -
A block of mass 0.249 kg is placed on top of a light, vertical
spring of...
asked 11 months ago -
how do the kidneys compensate in the presences of acidosis
a) trigger hyperventilate
b) reserve acid...
asked 11 months ago -
Question 501 pts
The rental rate of capital to the firm increases. Which of the
following...
asked 11 months ago