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Sveta_85 [38]
3 years ago
13

Jacqui decides to open her own business and earns $50,000 in accounting profit the first year. When deciding to open her own bus

iness, she withdrew $20,000 from her savings, which earned 5 percent interest. She also turned down three separate job offers with annual salaries of $30,000, $40,000, and $45,000. What is Jacqui's economic profit from running her own business?a. $-56,000.b. $-6,000.c. $4,000.d. $19,000.
Business
1 answer:
Ira Lisetskai [31]3 years ago
3 0

Answer:

C) $4,000

Explanation:

To calculate economic profit we can use the following formula:

economic profit = total revenue - (accounting costs + implicit costs) = (total revenue - accounting cost) - implicit costs

where:

  • accounting profit = total revenue - accounting cost = $50,000
  • implicit costs: ($20,000 x 5%) + $45,000 = $1,000 + $45,000 = $46,000

economic profit = $50,000 - $46,000 = $4,000

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Answer:

$34,310.45

Explanation:

Net present value is the present value of after-tax cash flows from an investment less the amount invested.  

NPV can be calculated using a financial calculator  

Only projects with a positive NPV should be accepted. A project with a negative NPV should not be chosen because it isn't profitable.  

When choosing between positive NPV projects, choose the project with the highest NPV first because it is the most profitable.

Cash flow in year 0 =  $-200,000

Cash flow in year 1 - 5 = 65,000

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NPV = $34,310.45

To find the NPV using a financial calculator:

1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.

2. after inputting all the cash flows, press the NPV button, input the value for I, press enter and the arrow facing a downward direction.  

3. Press compute  

6 0
3 years ago
According to the cost-push theory , what is responsible for inflation?
Tasya [4]
When resources are low, businesses know that they can increase their prices because people need them desperately.
6 0
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Read 2 more answers
"In the corn market, demand often exceeds supply and supply sometimes exceeds demand." "The price of corn rises and falls in res
alexandr402 [8]

Answer: In the second statement

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If the demand for a product is higher than its supply then its price will increase and vice versa.

Thus, from the above we can conclude that the second statement is correct.

3 0
3 years ago
How is it that people working in their own self-interest produce goods, services, and wealth for others?
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Answer:

Explanation:

In order to earn money and produce goods that improve lives, self-directed gain would provide jobs, and subsequently wages for others.

The way people can become wealthy by their own efforts is to sell what they produce to others. As the business grows, labor is hired to produce more. This is the 'invisible hand' concept that turns self-directed gain into social and economic benefits for all.

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pishuonlain [190]

Answer:

Option A is the correct approach.

Explanation:

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The other options offered are also not relevant to the scenario presented. So, the solution above is the right one.

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