Zach withdrew $400,000 out of his personal savings account and used it to start his new cookie business. The bank account pays 3 percent interest per year. During the first year of his business, Zach sold 6,000 boxes of cookies for $2.50 per box. Also during the first year, the cookie business made monetary outlays of $9,000. You may assume that there is no opportunity cost to Zach’s time.
a. Zach's accounting profit for the year was?
b. Zach's economic profit for the year was?
Answer:
a.$6000
b.$-6000
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Using the compensating differential approach, the value of a life is calculated as
A) the compensating differential multiplied by the increased chance of death. B) the sum of the compensating differential and the increased chance of death. C) the compensating differential divided by the increased chance of death. D) the difference between the compensating differential and the increased chance of death.
Refer to the scenario above. If Joseph prefers fairness to money, ________
A) he will not accept any offer made by Phillip B) he will always accept any offer made to him C) he will accept the offer if offered an equal share of the money D) Phillip will offer the minimum amount of money to Joseph
With a rise in the rate of depreciation that ________, the user cost of capital falls, leading to a ________ capital-labor ratio, thus a ________ in investment
A) actually occurs to capital, higher, rise B) actually occurs to capital, lower, rise C) actually occurs to capital, lower, fall D) is used to calculate corporate taxes, higher, rise E) is used to calculate corporate taxes, lower, fall
Most towns were initially established at locations with
(a) an excellent harbor and river stretching into the hinterland. (b) an excellent harbor and flat land so roads could be easily built into the hinterlands. (c) in mountainous areas which provided better protection against Indians. (d) extensive forests to provide fuel and lumber.