Question

Leslie quit her job where she earned $75,000 per year, to start her own accounting firm. She invested $60,000 of her own funds in furniture, computers, and other assets. During the first year of operation, the firm’s costs were $22,000 for rent on the office building, $180,000 for wages and salaries of employees, and $12,000 for supplies and utilities. The market value of the firm’s assets at the end of the year was $48,000. During the year, the firm billed its clients for 2,000 hours at $150 per hour. The typical rate of return on financial investments in the economy was 5%. What was Sarah's economic profit? Question 4 options: $26,000 −$4,000 −$49,000 $8,000 $11,000 ..

Answer 1