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10. A proprietor who just inherited a building is considering using it in a new business venture. Projections for the business are: revenue of $100,000, fixed cost of $30,000, and variable cost of $50,000. If the business is not started, the owner will work for a company for a wage of $23,000. Also, there have been two offers to rent the building, one for $1,000 per month and one for $1,200 per month. What are the expected annual net economic profits (losses) to the owner if the new business is started? A. $20,000 B. $ (3,000) C. $(15,000) D. $(17,400)

10. A proprietor who just inherited a building is considering using it in a new business venture. Projections for the business are: revenue of $100,000, fixed cost of $30,000, and variable cost of $50,000. If the business is not started, the owner will work for a company for a wage of $23,000. Also, there have been two offers to rent the building, one for $1,000 per month and one for $1,200 per month. What are the expected annual net economic profits (losses) to the owner if the new business is started? A. $20,000 B. $ (3,000) C. $(15,000) D. $(17,400)

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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10. A proprietor who just inherited a building is considering using it in a new business venture. Projections for the business are: revenue of $100,000, fixed cost of $30,000, and variable cost of $50,000. If the business is not started, the owner will work for a company for a wage of $23,000. Also, there have been two offers to rent the building, one for $1,000 per month and one for $1,200 per month. What are the expected annual net economic profits (losses) to the owner if the new business is started? A. $20,000 B. $ (3,000) C. $(15,000) D. $(17,400)
Transcribed Image Text:10. A proprietor who just inherited a building is considering using it in a new business venture. Projections for the business are: revenue of $100,000, fixed cost of $30,000, and variable cost of $50,000. If the business is not started, the owner will work for a company for a wage of $23,000. Also, there have been two offers to rent the building, one for $1,000 per month and one for $1,200 per month. What are the expected annual net economic profits (losses) to the owner if the new business is started? A. $20,000 B. $ (3,000) C. $(15,000) D. $(17,400)
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