21. Sandy owns a firm with annual revenues of $1,000,000. Wages, rent, and other costs are $900,000. a. Sandy's accounting profit is $ 100000 b. Suppose that instead of being an entrepreneur, Sandy could get a job with one of the following annual salaries (i) $50,000; (ii) $100,000; or (iii) $250,000. Assume that a job would be as satisfying to Sandy as being an entrepreneur. Sandy's economic profit under scenario (i) is $ Sandy's economic profit under scenario (ii) is $ Sandy's economic profit under scenario (iii) is $

21. Sandy owns a firm with annual revenues of $1,000,000. Wages, rent, and other costs are $900,000. a. Sandy's accounting profit is $ 100000 b. Suppose that instead of being an entrepreneur, Sandy could get a job with one of the following annual salaries (i) $50,000; (ii) $100,000; or (iii) $250,000. Assume that a job would be as satisfying to Sandy as being an entrepreneur. Sandy's economic profit under scenario (i) is $ Sandy's economic profit under scenario (ii) is $ Sandy's economic profit under scenario (iii) is $

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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4. Sherry runs a dog grooming business. She has rent of $5,000 per month and must have an assistant to work with her to keep things going. The assistant costs $3,500 per month and supplies cost $1,500 per month. Sherry also has a storage unit where she keeps equipment that she might need at a cost of $1,000 per month. What should Sherry do under the following scenarios? Be sure to show your calculations. a. Sherry has monthly revenue of $8,000 b. Sherry has monthly revenue of $5,000 c. Sherry decides to shut down d. Of the alternatives presented above, which one presents the best outcome? Explain.
A firm had sales revenue of $1 million last year. It spent $600000 on labor, $150000 on capital and$200000 on materials. What was the firm’s accounting profit?
Which of the following is considered when calculating economic profit but not accounting profit? a. implicit cost b. explicit cost c. total revenue d. marginal cost e. All of the above are considered when calculating accounting profit.
2. Calculate accounting profit and economic profit for each of the following firms (amounts are in millions of dollars) Sales Wages and salaries cost of equity capital interest on debt cost of materials General Motors $50,091 29052 12100 7585 6500 Barclays Bank 5730 3932 750 275 556 Microsoft 2750 400 35 5 1650
1. Suppose your current job pays you $300,000 a year. However, you are considering starting your own company. Based upon your research, you estimate your first year total revenue to be $7,500,000. There are however several costs of running the company during this first year, such as the cost of materials which will equal $2,750,000, employees who will receive in total $1,500,000, utilities which will cost $1,200,000, and rent that will be paid to the landlord that equals $1,800,000. Based on this information, solve for both your accounting profit and economic profit during this first year. Also, based upon these profit values, state whether you are better off starting this company or staying in your current job.
6 If a company’s total revenue is $1,744,322, their explicit costs are $863,214, and their implicit costs are $506,688, then what is their Accounting profit? What is their economic profit? (Show your work).
Gloria decided to open her own business and earns $50,000 in accounting profit the first year. When deciding to open her own business, she turned down three separate job offers with annual salaries of $50,000, $60,000, and $70,000. What is Gloria's economic profit from running her own business? Question 5 options: a) -$75,000 b) -$20,000 c) $20,000 d) none of the above
Ball Bearings, Inc., faces costs of production as follows: Quantity Total Fixed Costs Total Variable Costs (Dollars) (Dollars) 0 180 0 1 180 80 2 180 140 3 180 180 4 180 240 5 180 320 6 180 450 the following table by calculating the company's total cost, marginal cost, average fixed cost, average variable cost, and average total cost at each level of production. Quantity Total Cost Marginal Cost Average Fixed Cost Average Variable Cost Average Total Cost (Dollars) (Dollars) (Dollars) (Dollars) (Dollars) 0 1 2 3 4 5 6 The price of a case of ball bearings is $80. Seeing that he can't make a profit, the company's chief executive officer (CEO) decides to shut down operations. The firm's profit in this case is . (Note: If the firm…
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Question 8 page 28 Janet spends $20,000 per year on painting supplies and storage space. She recently received two job offers from a famous marketing firm- one offer were for $100,000 per year, and the other was for $90,000. However, she turned both jobs down to continue a painting career. If Janet sells 25 paintings per year at a price of $8,000 each: a. What are her accounting profits? Show your steps leading to your answer b. What are her economic profits? Show your work!
Question 20 of 20 Reggie owns and operates a cheese shop in the village of Somerset. Although Reggie has a degree in mechanical engineering and could easily go to work for his brother's company earning $76000 a year, his true passion is for cheese. Consider the list of Reggie's revenue and expenses from last year. Please use the information provided to answer the questions. Revenue from 2010 $90000 Rent $18000 Equipment $6000 Supplies $3000 What is Reggie's accounting profit? What is Reggie's economic profit? -$13000 $63000 $3000 O -$13000 -$63000 $3000 $63000 -$63000
An web designer quits a project where she was paid $50,000 on completion of the project. She joins a new company with sales revenues of $550,000 last year, while spending $250,000 on compensation for employees (excluding the owner), $70,000 on capital, and $30,000 on materials. What was the firm’s economic profit? A) 25,000 B) 100,000 C) 150,000