Question

James used $250,000 from his savings account that paid an annual interest of 15% to purchase a hardware store. After one year, James sold the business for $320,000. What is his economic profit

Answer 1

The economic profit is $320,000-$250,000=$70,000.

Economic earnings or loss is the distinction between the sales received from the sale of an output and the costs of all inputs used, as well as any opportunity prices. In calculating financial income, opportunity charges and explicit costs are deducted from revenues earned.

Income is the financial metric that suggests an entity's economic advantage or sales from any enterprise or funding interest. monetary profit is cash earned after taking explicit and implicit costs into account.

Profit is the financial metric that shows an entity's financial advantage or sales from any commercial enterprise or investment pastime. economic earnings are cash earned after taking explicit and implicit prices into consideration.

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