An owner canlease her building for $160,000 per year for three years. The explicit cost of maintaining the building is $55,000, and the implicit cost is $70,000. 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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ISBN:9780190931919
Author:NEWNAN
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Chapter1: Making Economics Decisions
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An owner canlease her building for $160,000 per year for three years. The explicit cost of maintaining the building is $55,000, and the
implicit cost is $70,000. 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.
$1
b. Economic profits
Transcribed Image Text:An owner canlease her building for $160,000 per year for three years. The explicit cost of maintaining the building is $55,000, and the implicit cost is $70,000. 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. $1 b. Economic profits
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