1. An entrepreneur is thinking of starting a firm. The firm will pay Tk. 320,000 in wages/salary, Tk. 150,000 on raw materials, Tk. 100,000 for rent per month. If the entrepreneur worked as a manager for somebody else, he would earn Tk. 50,000 per month. The firm's total revenue per month is Tk. 600,000. a) Calculate the accounting profit of this firm. b) Do you think the entrepreneur should start this firm, explain your answer.
1. An entrepreneur is thinking of starting a firm. The firm will pay Tk. 320,000 in wages/salary, Tk. 150,000 on raw materials, Tk. 100,000 for rent per month. If the entrepreneur worked as a manager for somebody else, he would earn Tk. 50,000 per month. The firm's total revenue per month is Tk. 600,000. a) Calculate the accounting profit of this firm. b) Do you think the entrepreneur should start this firm, explain your answer.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Calculate accounting of profit and explain why should the entrepreneur start this farm or not.
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