An owner can lease her building for $150,000 per year for three years. The explicit cost of maintaining the building is $50,000, and the implicit cost is $65,000. All revenues are received, and costs borne, at the end of each year. If the interest rate is 6 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

An owner can lease her building for $150,000 per year for three years. The explicit cost of maintaining the building is $50,000, and the implicit cost is $65,000. All revenues are received, and costs borne, at the end of each year. If the interest rate is 6 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

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter16: The Markets For Labor, Capital, And Land

Section: Chapter Questions

Problem 12P

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An owner can lease her building for $150,000 per year for three years. The explicit cost of maintaining the building is $50,000, and the
implicit cost is $65,000. All revenues are received, and costs borne, at the end of each year. If the interest rate is 6 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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