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.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Calculate accounting of profit and explain why should the entrepreneur start this farm or not.

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.
Transcribed Image Text: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.
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