Anna is a tax accountant and she left her job with a large public accounting company to start her own accounting office. In doing this, Anna gave up her salary of $120,000 and took $60,000 out of her savings (which was earning a return of 5 percent) to fund her startup. Her first year, she had $180,000 in revenues and had $40,000 in operating expenses. Anna’s tax accounting business earned economic profits of
A. $140,000.
B. $17,000.
C. $20,000.
D. zero.
Answer: B
Economics
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