Question

An owner can lease her building for $120,000 per year for three years. The explicit cost...

An owner can lease her building for $120,000 per year for three years. The explicit cost of maintaining the building is $40,000,and the implicit cost is $55,000. All revenue are received,and cost borne, at the end of each year. If the interest rate is 5 percent, determine the present value of the stream of: Accounting profits and Economic profits
Business   Economics   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Suppose Marv, the owner-manager of Marv’s Hot Dogs, earned $170,000 in revenue last year. Marv’s explicit...
Suppose Marv, the owner-manager of Marv’s Hot Dogs, earned $170,000 in revenue last year. Marv’s explicit costs of operation totaled $130,000. Marv has a Bachelor of Science degree in mechanical engineering and could be earning $60,000 annually as mechanical engineer. a.        Marv's implicit cost of using owner-supplied resources is $___                           __. b.       Marv’s accounting profit is $_____           _______.   c.         Marv's economic profit is $__                         _____.
Lisa Conway worked as a real estate agent for Avis Reality for 12 years. Her annual...
Lisa Conway worked as a real estate agent for Avis Reality for 12 years. Her annual income is approximately $120,000 per year. Lisa is considering establishing her own real estate agency. She expects to generate revenues during the first year of $3 million. Salaries paid to her employees are expected to total $2 million. Operating expenses (i.e., rent, supplies, utility services) are expected to total $300,000. To begin the business, Lisa must borrow $550,000 from his bank at an interest...
A currently employed woman, working for $120,000 per year is considering opening her own business. She...
A currently employed woman, working for $120,000 per year is considering opening her own business. She estimates that renting a space will cost her $50,000 per year; hiring a part-time employee will cost her $25,000 per year; purchasing equipment will cost $30,000; and other out-of-pocket expenses will come to $15,000. She estimates that her total revenues will be $225,000 per year. a. How much would be the explicit costs of her business be? b. How much would the accounting costs...
A currently employed woman, working for $120,000 per year is considering opening her own business. She...
A currently employed woman, working for $120,000 per year is considering opening her own business. She estimates that renting a space will cost her $50,000 per year; hiring a part-time employee will cost her $25,000 per year; purchasing equipment will cost $30,000; and other out-of-pocket expenses will come to $15,000. She estimates that her total revenues will be $225,000 per year. a. How much would be the explicit costs of her business be? b. How much would the accounting costs...
Jamie is considering leaving her current job, which pays $75,000 per year, to start a new...
Jamie is considering leaving her current job, which pays $75,000 per year, to start a new company that develops applications for smartphones. Based on market research, she can sell about 50,000 units during the first year at a price of $4 per unit. With annual overhead costs and operating expenses amounting to $145,000, Jamie expects a profit margin of 20 percent. This margin is 5 percent larger than that of her largest competitor, Apps, Inc. a. If Jamie decides to...
Cathy Smith manages a photocopying establishment and earns $30,000 per year. She decides to leave her...
Cathy Smith manages a photocopying establishment and earns $30,000 per year. She decides to leave her current job and open and operate her own store. She invests $20,000 into the company to start her business, which she takes out of her savings account that was earning 5% interest per year. During her first year of operation she expects the following: Revenue from sales $110,000 Salaries to hired help $45,000 Supplies$15,000 Rent$12,000 Utilities$13,000 ----------------------------------------------------------- 1. Calculate expected explicit costs for year...
Ms. Ramirez runs a small consulting firm. She rents a building for $4,000, the cost of...
Ms. Ramirez runs a small consulting firm. She rents a building for $4,000, the cost of two secretaries is $40,000 and the annual cost of electricity and gas is $6,000. There is great demand for her work and her total revenue is $150,000. She was offered a job with another firm for $75,000 salary, but she refused the offer. The money (all of which is her own) invested in her company could have been put in a bank and could...
1. A currently employed woman, working for $40,000 per year is considering opening her own business....
1. A currently employed woman, working for $40,000 per year is considering opening her own business. She estimates that renting a space will cost her $30,000 per year; hiring a part-time employee will cost her $20,000 per year; purchasing equipment will cost $70,000; and other out-of-pocket expenses will come to $30,000. She estimates that her total revenues will be $170,000 per year. a. How much would be the explicit costs of her business be? b. How much would the accounting...
The cost information for Delicious Pizza Company for the year 2019 is shown as below: Entrepreneur’s...
The cost information for Delicious Pizza Company for the year 2019 is shown as below: Entrepreneur’s potential earnings as a salaried workers = RM50, 000 Monthly lease on building = RM2, 000 Annual revenue from operations = RM380, 000 Annual payment to workers = RM120, 000 Annual utilities (electricity and water) costs = RM8, 000 Annual entrepreneur’s potential economic profit from the next best entrepreneurial activity = RM80, 000 Forgone interest on personal funds used to finance the business =...
Jodi is a successful lawyer. She earns $50,000 per year from her law job plus $5,000...
Jodi is a successful lawyer. She earns $50,000 per year from her law job plus $5,000 per year in rental income from a building she owns that is rented to a clothing store. Jodi also has $10,000 in a savings account that earns 10% interest, or $1,000 per year. One day, Jodi decides to leave her profession and open a bookstore in the building she owns. She withdraws the money from her savings account and uses it to purchase special...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT