5. Suppose Fahad is owner of Potato Fries shop in Riyadh City. He earns SAR 500,000 in revenue per year from this business. He spends SAR 1000 a month on GAS for his stove, SAR 1000 a month on rent, and SAR 1500 a month on ingredients. He used to be a teacher and earned 440,000 a year before he opened up Potato Fries shop. Normal profit for a potato fries' business is SAR 30,000. What is Fahad's economic profit? Answer . Page 7 of 8
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- What is die difference between accounting and economic profit?2. Robert is thinking of running a flower business. His delivery van, including insurance, will cost 840$per month and his advertisement costs $360 per month. If he prices each bouquet at 40$ each, heestimates that they can sell 100 units per month. What is the most they can spend to purchase eachbouquet of flowers to break even?Under which of the folowing examples is t likaly that the accounting profit is positive and the economic profit is negative? OA Using a restaurant you purchased to sell Menican food instead of talian food. OR It you use a diamond mine as a touriet atraction instead of using it for mining. Oc Opering a bank branch near a university campus. OD. Such a scenario, where accounting cost is positive and economic profit is negafive, is not possibie.
- Scenario 5.1 A dentist's practice is organized as a sole proprietorship. Last year the dentist's tota revenue was 5320,000and totalcosts were5250.000.The dentist left a Job paving $112,000 ayear to start the sole proprietorship, Question: According to the information in Scenario 5.1, how much accounting profit did the dentist make last year? O $320.000 O S70.000 O $208.000 O $112.0001. A firm has three different production facilities, all of which produce the same product. Whilereviewing the firm’s cost data, Ron, a manager, discovered that one of the plants has a higher averagecost than the other plans and suggests closing this plant. Another manager, Jack, notes that the high-cost plant has high fixed costs but that the marginal cost in this plant is lower than in the other plants.He says that the high-cost plant should not be shut down but should expand its operations. Who isright? 2. Should a firm shut down if its weekly revenue is $1,000, its variable cost is $500, and its fixed cost is$800, of which $600 is avoidable if it shuts down? Explain.Cours Soru 11 Total revenue minus total cost is equal to ---- Henüz cevaplanmadı Lütfen birini seçin: ОА profit. 4 üzerinden işaretlenmiş O B. marginal cost P Soruyu işaretle O C. marginal revenue. O D. net cost. O E the rate of return. SON ÖNCEKİ SAYFA cC AYBUZEM O 'deki ders materyalleri Creative Commons açık lisansları ile lisanslanmıştır.
- Compare the average total cost and the marginal cost and explain the relationship Describe the methods that can be used to dertermine where profit is maximized L Q MP MC TC ATC 0 0 200 1 20 20 5.00 300 15 2 50 30 3.33 400 8 3 90 40 2.50 500 5.56 4 120 30 3.33 600 5.00 5 140 20 5.00 700 5.00 6 150 10 10.00 800 5.33 7 155 5 20.00 900 5.81ЕОС 13.5B Morgan took $400 000 out of their savings account to start an ice cream stand. The savings account paid 5% interest. In the first year, Morgan sold 12,000 batches of ice cream at a price of $3 each, and incurred costs of $12,000 which involved outlays of money. What was Morgan's economic profit in the first year?Buffy is thinking about opening an amulet store. Sheestimates that it would cost $350,000 per year to rentthe location and buy the merchandise. In addition,she would have to quit her $80,000 per year job as avampire hunter. Buffy thinks she can sell $400,000 worth of amulets in a year. What would her accountant consider the store’s profit? 2. Should Buffy open the store? Explain.
- b. Calculate Theo's accounting profit2. Explain the difference between economic profit and accounting profit.Yverrry is earning $200,000 per year as medical sales representafive. Due to the covid pandemic, she decided to open a small restaurantin the City where she lives. She invested $200,000 of his savings that has been eaming $5,000 interest per year. Since there was vacant space in the area where she lives, she decided to use this lot to put up his restaurant. The lot has been earning $10,000.00 annually as it is beingrented as a parking space for the executives in the nearby Firm. She hired one (1) clerk and 3 helpers who will help him in the restaurant. Water and electricity bills for the year reached $50,000.00. Yverry will be paying the clerk $3,000.00 while the 3 helpers $2,500.00 each monthly. Affer a year of operation, Yverry was able to earn a sales revenue of $800,000.00 Required: Compute for the Yverry's accounting and economic profit.