ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN: 9780190931919
Author: NEWNAN
Publisher: Oxford University Press
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Transcribed Image Text:Jack decides to quit his job paying $28,000 a ycar and start his own business manufacturing and selling Extreme
skatcboards. Jack invests $40,000 of his own moncy from his savings account, which had been earning him
$2,000 in interest. The lease on the space Jack is renting costs him $10,000 a year. Jack's utilities (water,
clectricity, ctc.) cost him roughly $5,000 a year. The cost of buying the materials for the skateboards is $20,000 a
year.
To assist him in maintaining the store and production facility, Jack hires Sara, part-time, at a salary of $10,000 a
year. Jack knows his labor, skills and knowledge (entreprencurial abil
$10,000, Revecnuc for Extreme skateboards was $85,000.
of the skateboard industry is worth
Compute Jack's accounting profit and cconomic profit. Will Jack continuc to operate his own extreme sports
shop or will he quit and do something clsc? Explain
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