Answer:
Economic loss=$(28,000)
Explanation
Accounting profit is the difference between total revenue and explicit cost.
Explicit cost refers to all cash and non cash cost incurred to produce the goods and services
Economic profit = sales revenue - explicit cost - implicit cost
Implicit cost is the opportunity cost - the value of the next best alternative sacrificed to produce the product.
The opportunity cost in the case is the worth of the offer to work elsewhere which is equal to $25,000
Economic profit = (7,000× 6) - 45,000- 25,000=$ (28,000)
Economic loss=$(28,000)
Answer:
A) high magnitude of consequences.
Explanation:
Delayed product delivery is less of an issue when compared to delivering a faulty product, which can potentially cause harm. This is because delivering a faulty product has a high magnitude of consequences.
The customer is the king in the market, the company can not afford to lose reputation by a delivery faulty product. Especially in the era of social media, these mistakes can cause loss of market share and can potentially damage the credibility of the company´s product, which could take lot of time to rebuild. It may also affect other product of the company to lose reputation.
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Answer:
$29,750
Explanation:
Since the Annual Payments of $53,343 are all equal for the period of 10 years at 8.5% installment note, therefore we Simple interest formula here to calculate the interest amount;
I = Prt
P = Principal Amount = $350,000
r = Interest Rate = 8.5%
t = time = 10-year
I = Interest = 350,000 x 0.085 x 10 = 297,500
Hence, the first annual payment of interest expense will be:
= 297,500 / 10 = $29,750
