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 1. Determine Wendy’s total implicit costs? Explain in detail 2. What is Wendy’s economic profit from running her own business ? Explain in detail show all calculations
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 1. Determine Wendy’s total implicit costs? Explain in detail 2. What is Wendy’s economic profit from running her own business ? Explain in detail show all calculations
Chapter13: Choice Of Business Entity—general Tax And Nontax Factors/formation
Section: Chapter Questions
Problem 76TPC
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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
1. Determine Wendy’s total implicit costs? Explain in detail
2. What is Wendy’s economic profit from running her own business ? Explain in detail show all calculations
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