Answer:
Implicit Costs = $35,000
correct option is b. $35,000
Explanation:
given data
total revenue = $100,000
rent = $3,000
overhead averages = $500 per month
Ramona earn = $35,000 per year
to find out
total implicit costs
solution
we know that here Total Rent paid is
Total Rent paid = 3000 × 12
Total Rent paid = $36000
and
Total employee payment = 2000 × 12
Total employee payment = $24000
and
Total ingredient and overhead = 500× 12
Total ingredient and overhead = $6000
and
Explicit Costs = 36000 + 24000 + 6000 = $66000
so here
Implicit Costs = The opportunity cost of not working as a manager
Implicit Costs = $35,000
correct option is b. $35,000
Answer:
$14,880
Explanation:
The formula to compute EVA is shown below:
= Net operating income or earnings after taxes - (Total capital employed × cost)
= $45,360 - ($381,000 × 8%)
= $45,360 - $30,480
= $14,880
We simply applied the economic value added formula so that the accurate value can come.
All other information which is given is not relevant. Hence, ignored it
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