An owner can lease her building for $140,000 per year for three years. The explicit cost of maintaining the building is $45,000, and the implicit cost is $60,000. All revenues are received, and costs borne, at the end of each year. If the interest rate is 5 percent, determine the present value of the stream of: Instructions: Do not round intermediate calculations. Round your final calculation to two decimal places. a. Accounting profits. $ b. Economic profits. $

ENGR.ECONOMIC ANALYSIS
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Chapter1: Making Economics Decisions
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An owner can lease her building for $140,000 per year for three years. The explicit cost of maintaining the building is $45,000, and the
implicit cost is $60,000. All revenues are received, and costs borne, at the end of each year. If the interest rate is 5 percent, determine
the present value of the stream of:
Instructions: Do not round intermediate calculations. Round your final calculation to two decimal places.
a. Accounting profits.
$
b. Economic profits.
$
Transcribed Image Text:An owner can lease her building for $140,000 per year for three years. The explicit cost of maintaining the building is $45,000, and the implicit cost is $60,000. All revenues are received, and costs borne, at the end of each year. If the interest rate is 5 percent, determine the present value of the stream of: Instructions: Do not round intermediate calculations. Round your final calculation to two decimal places. a. Accounting profits. $ b. Economic profits. $
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