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Luda [366]
3 years ago
14

Yakov lives in San Diego and runs a business that sells boats. In an average year, he receives $704,000 from selling boats. Of t

his sales revenue, he must pay the manufacturer a wholesale cost of $404,000; he also pays wages and utility bills totaling $286,000. He owns his showroom; if he chooses to rent it out, he will receive $3,000 in rent per year. Assume that the value of this showroom does not depreciate over the year. Also, if Yakov does not operate this boat business, he can work as an accountant and receive an annual salary of $20,000 with no additional monetary costs. No other costs are incurred in running this boat business. Identify each of Yakov's costs in the following table as either an implicit cost or an explicit cost of selling boats. Complete the following table by determining Yakov's accounting and economic profit of his boat business. If Yakov's goal is to maximize his economic profit, he stay in the boat business because the economic he would earn as an accountant would be __________
Business
1 answer:
Stolb23 [73]3 years ago
7 0

Answer:

Yakov's explicit costs are the monetary costs that he pays while running his business:

Payment to manufacturer: $404,000

Wages and utility bills: $286,000

Total explicit costs: $690,000

Yakov's implicit costs are his opportunity costs, in other words, the things he gives up in order to run his business:

Rent he would get for his showroom: $3,000

Wage he would get as an accountant: $20,000

Total implicit costs: $23,000

Yakov's accounting profit is equal to revenue minus total explicit costs:

Accounting profit = $704,000 - $690,000

                             = $14,000

Yakov's economic profit is equal to revenue minus total costs (the sum of implic costs and explicit costs)

Economic profit = $704,000 - $713,000

                          = ($9,000)

Despite the fact that Yakov is not earning an economic profit selling boats, as an accountant, he would give up on the $704,000 that he is been making from selling boats. For that reason, he should keep the boat selling business.

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Explanation:

Two important trends in the labor force participation rates of adults aged 20 and over in the United States since 1948 are the​ rising labor force participation rate of adult women and the​ falling labor force participation rate of adult men.

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Which set of changes is definitely predicted to lower real gdp in the short run?
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D. foreign real national income falls and wages rates rise. 
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Sam believes in rewarding his employees for their hard work. he is acting as a when he processes their merit raises promptly on
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Answer:

c) leadership is first and foremost about establishing a personal bond with employees

Explanation:

Sam believes in rewarding his employees for their hard work. he is acting as a  _______ when he processes their merit raises promptly on their hire date anniversaries.

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When country music star miranda lambert delivered a message that endorsed milk when she appeared in an ad that is part of "the b
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A direct source

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8 0
3 years ago
Blossom Furniture Company started construction of a combination office and warehouse building for its own use at an estimated co
motikmotik

Answer:

weighted average rate: 11.14%

capitalize interest (avoidable interest) 421,270.24‬ dollars

Explanation:

construction related loan:

4,400,000 12%  =     528,000

general use:

3,080,000 10%  =    308,000

<u>2,200,000</u> 11%  =   <u>  242,000</u>

9,680,000  1,078,000

weighted-average rate: 1,078,000 / 9,680,000 = 0.111363636 = 11.14%

capitalize interest:

weighted-average amount of accumulated expenditures x w/a rate:

3,781,600 x 11.14% = 421,270.24‬

6 0
3 years ago
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