Answer:$141,000
Explanation:
Implicit cost related to the given question
Earning as a college faculty left = 70,000
Interest on own investment = 6% on 42,000 = 2520
Total implicit cost = 70,000+2520 = 72,520
Explicit cost the related to the given question
Rent of office equipment = 25,000
Hiring two students at 18,000 each = 36,000
Rent of office space = 10,000
Other variable expenses = 38,000
Total explicit cost = 25,000+36,000+10,000+38,000 = 109,000
Total Revenue = 250,000
Accounting profit = Total Revenue – Explicit Cost
Accounting profit = 250,000 – 109,000 = $141,000
