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Burka [1]
3 years ago
7

You use $50,000 of your own money to start a catering business. During the first year you earn a 5% return on that investment. I

f the current interest rate is 8%, you earn an economic profit of _____.
Business
1 answer:
Romashka-Z-Leto [24]3 years ago
6 0

Answer:

-$1,500

Explanation:

If the current interest rate is 8%, you earn an economic profit of:

Economic profit = Profit - Opportunity cost

Economic profit = (0.05 * $50000) - (0.08 * $50000)

Economic profit = $2,500 - $4,000

Economic profit = -$1,500

So, i will earn an economic loss of $1,500

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