Gertrude quit her $40,000- per- year job to start her own own consulting firm. She withdrew her savings of $50,000 which was earning her an interest of $2000 in the bank and invested in her own consulting firm. At the end of her first year of operation, her total revenues were $208,000. Her total explicit costs were $108,000. How much are her accounting profits from her own consulting firm? O $50,000 O $30,000 O $100,000 O $48,000
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- A firm is considering an investment that will earn a 6 rate of return. If it were to borrow the money, it would have of pay 8 interest on the loan, but it currently has the cash, so it will But need to borrow. Should the firm make line investment? Show your work.Eustace H. Hogan has been an employee of Major Drilling for the last two years. He uses an office in his basement to fill out orders on the internet, call customers on his cell phone, and do paperwork related to his business. Because Major Drilling doesn't have an office in his city, this is his only place of business. His home office is 200 square feet in size and he thinks his house is 2,000 sqare feet in total size. His home costs for the year are listed below. He does not earn any commissions from his work. How much can be deduct from his employment income? (remember that deductions are negative(xxx.xx)) cell phone $600(used 100% for employment) internet $1,000(used for the whole home) power/hydro $2,000 mortgage principle $6,000(repayment of mortgage) pool installed $20,000(in the backyard)Question 5 The sole proprietor of the "Books and More" bookstore receives all accounting profits earned by her firm and a $28,000-a-yearsalary she pays herself. She has a standing salary offer of $35,000 a year if she agrees to work for a large corporation. If she had invested her capital outside her own company, she estimates that would have returned $22,000 a year. Last year, her accounting profit was $50,000. What was her economic profit?
- You are currently in a job as a chef in a restaurant earning $100,000 per year. You are considering opening up a restaurant in a building which you currently own. You estimate that, if you wanted to, you could rent out your building for $25,000 per year to another restaurant. Last year, your revenues and expenses from the restaurant were the following: Revenues $400,000Cost of Food $120,000Salaries/Wages $100,000Utilities $25,000Taxes $20,000 What is your accounting profit? Show your calculations What is your economic profit? Show your calculations Assuming that you are indifferent between being a chef or owning a restaurant, should you open up your restaurant? Explain why. Now suppose that instead of owning the building where your restaurant will be located, you had to pay rent of $25,000 per year for the building. Will your answers to parts 1-3 change? Show your calculations. Explain how and why your answers will change or…Economics Wendy decides to open her own business and earns 70,000 in accounting profit the first year. When deciding to open her own business she withdrew 20,000 from her savings which earned 2.5 percent interest took over a building that she owns and was renting to her friend for 12,500 a year. She also turned down three separate job offers with annual salaries of 30000 40,000, And 47,000 Determine Wendy’s total implicit costs? Explain in detail What is Wendy’s economic profit from running her own business ? Explain in detail show all calculationsThe manager of the donut shop tells you that hesells donuts for $1 each, and that if he were to makeadditional donuts, based on his current level ofoutput, it would cost him $0.80 per donut. Do yourecommend that the manager increase or decreasethe number of donuts he makes?
- Which of the following terms shows a firm's revenues, costs, and profit over a period of time? O A. the firm's accounting profit OB. the firm's economic proftit C. the balance sheet OD. the income statementJason owns a small pizza restaurant, where he works full time in the kitchen. His total revenue last year was $136,000, and his rent was $2,610 per month. He pays his one employee $2,200 per month, and the cost of ingredients and overhead averages $960 per month. Jason could earn $32,600 per year as manager of al competing pizza restaurant nearby. What's Jason's accounting profit for the entire year? Your Answer: AnswerDQ Saved Не Check my work mode : This shows what is correct or incorrect for the work you have completed so far. It does not indicate com Meyer Stores carries a specialty line of flavored syrups. One of the most popular of these is raspberry syrup which sells, on average, 55 bottles per week. Meyer's cost is $9 per bottle. Meyer has determined its order cost to be $54 and inventory carrying cost is 20 percent. Meyer is open for business 52 weeks per year. a. What is the EOQ for raspberry syrup? (Round up your answer to the next whole number.) Answer is complete but not entirely correct. EOQ 414 X units b. If Meyer orders the EOQ quantity each time, what will be the inventory turnover rate for raspberry syrup? (Hint Inventory turnover = Annual sales in units / Average inventory in units.) (Round your answer to 2 decimal places.) X Answer is complete but not entirely correct. Inventory turnover rate 13.82 X times per year Prev. 1 of 3 Next >
- According to the Law of Diminishing Returns As more units of a variable factor are used with a fixed factor, beyond some point total production will begin to decline.. Investing more money into the same financial investment will always result in a diminished fiancial return. O If a firm makes another type of product available to its customers, then it will generate less revenue from its new type of product compared to its existing products. As more units of a variable factor are used with a fixed factor, beyond some point it becomes harder and harder for a firm to increase production.. Joe quits his computer programming job, where he was earning a salary of $60,000per year, to start his own computer software business in a building that he owns andwas previously renting out for $24,000 per year. In his first year of business he has thefollowing expenses: salary paid to himself, $40,000; rent, $0; other expenses, $25,000.Find the accounting cost and the economic cost associated with Joe’s computer softwarebusiness.A firm has three different production facilities, all of which produce the same product. Whilereviewing the firm’s cost data, Ron, a manager, discovered that one of the plants has a higher averagecost than the other plans and suggests closing this plant. Another manager, Jack, notes that the high-cost plant has high fixed costs but that the marginal cost in this plant is lower than in the other plants.He says that the high-cost plant should not be shut down but should expand its operations. Who isright?