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3 years ago

Calculate the accounting

Business

1 answer:

kondor19780726 [428]3 years ago

7 0

Answer:

(a) $60; $20 million

(b) $25; -$5 million

(d) -$25; -$75 million

Explanation:

(a)

Accounting Profit = Total revenues - Explicit cost

= $150 - $90

= $60 million

Economic Profit = Accounting Profit - Implicit cost

= $150 - $90 - $40

= $20 million

(b)

Accounting Profit = Total revenues - Explicit cost

= $125 - $100

= $25 million

Economic Profit = Accounting Profit - Implicit cost

= $125 - $100 - $30

= -$5 million (that's a negative $5 million)

(c)

Accounting Profit = Total revenues - Explicit cost

= $100 - $90

= $10 million

Economic Profit = Accounting Profit - Implicit cost

= $100 - $90 - $20

= -$10 million (negative $10 million)

(d)

Accounting Profit = Total revenues - Explicit cost

= $250 - $275

= -$25 million (negative $25 million)

Economic Profit = Accounting Profit - Implicit cost

= $250 - $275 - $50

= -$75 million (negative $75 million)

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