PROBLEMS1. Below is an annual income statement of Julian's Online Clothing Store. Julian is alreadyworking full time in the store and P300,000 of his money has been used (invested) to buythe store and stock it with merchandise. Julian just turned down a job offer to manage astore that will pay him P250,000 per year. He did not pay himself a salary in 2019.According to the data:A. Is Julian's Online Clothing Store generating a positive, zero, or negative accountingprofit for 2019? Show supporting calculations.B. What do you think are Julian's implicit costs (i.e., what are these benefits Julian iswilling to forego)?C. Assume that the interest was 12% annually in the money/funds market recalculateJoe's total opportunity costs.D. What was the economic profit (or loss of Julian's Online Clothing Store in 2019?E. Evaluate the business performance based on economic profit.RevenuesCostsSalesP550,000 Wholesale clothing20,000 EquipmentLaborP300,00020,000150,00010,000Inventory AdjustmentUtilities and insuranceTotal RevenuesP570,000 Total Costs$480,0002. Consider the following data of Speedy Delivery Service. Speedy DS needs to find out theproductivity and associated cost of hiring various levels of drivers. Output is measured indeliveries to clients (i.e., # of delivery rides to and from client destination) per week andeach driver is paid P4000 per week (Speedy's only variable cost). Complete the tablebelow and answer the following questions.LaborOutputMPАРAVCMC1818332452686.76780882A. What is AP of four drivers?B. What is the MP of the 6th driver?C. What is the AVC of providing 80 rides per week?What is the MC of increasing delivery services from 52 to 68 rides per week?E. What is the additional amount of output gained from hiring the fourth worker?D.

As per guidelines, we will answer the first question with three subpart question.

1. Below is an annual income statement of Julian's Online Clothing Store. Julian is already working full time in the store and P300,000 of his money has been used (invested) to buy the store and stock it with merchandise. Julian just turned down a job offer to manage a store that will pay him P250,000 per year. He did not pay himself a salary in 2019. According to the data: A. Is Julian's Online Clothing Store generating a positive, zero, or negative accounting profit for 2019? Show supporting calculations. B. What do you think are Julian's implicit costs (i.e., what are these benefits Julian is willing to forego)? C. Assume that the interest was 12% annually in the money/funds market recalculate Joe's total opportunity costs.

1. Below is an annual income statement of Julian's Online Clothing Store. Julian is already working full time in the store and P300,000 of his money has been used (invested) to buy the store and stock it with merchandise. Julian just turned down a job offer to manage a store that will pay him P250,000 per year. He did not pay himself a salary in 2019. According to the data: A. Is Julian's Online Clothing Store generating a positive, zero, or negative accounting profit for 2019? Show supporting calculations. B. What do you think are Julian's implicit costs (i.e., what are these benefits Julian is willing to forego)? C. Assume that the interest was 12% annually in the money/funds market recalculate Joe's total opportunity costs.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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