Revenues Revenue from sales of goods and services. Operating costs and expenses: Cost of products and services sold.. Selling expenses Administrative expense Total operating costs and expenses.... Income from operations. Interest expense (corporate bonds & loans). Non-recurring expense (Legal expenses/fines in settling a federal antitrust suit).... Income taxes. Net income. $80,000,000 $30,000,000 $3,000,000 $4.000.000 $37.000.000 $43,000,000 $300,000 $200,000 $700,000 $41,800,000 Quest Realty income statement is given above. During this year of operation, Quest Realty owned and occupied an office building in downtown Indianapolis. For this year, the building could have been leased to other businesses for $2,000,000 in lease income. Quest Realty also owned undeveloped land valued at $15,000,000. Owners of Quest Realty can earn a 14% rate of return annually on funds invested elsewhere. a. Calculate total explicit costs of using market-supplied resources for Quest Realty for this year b. Calculate total implicit costs of using owner-supplied resources for Quest Realty for this year c. Calculate Quest's accounting profit d. Calculate Quest's economic profit

Revenues Revenue from sales of goods and services. Operating costs and expenses: Cost of products and services sold.. Selling expenses Administrative expense Total operating costs and expenses.... Income from operations. Interest expense (corporate bonds & loans). Non-recurring expense (Legal expenses/fines in settling a federal antitrust suit).... Income taxes. Net income. $80,000,000 $30,000,000 $3,000,000 $4.000.000 $37.000.000 $43,000,000 $300,000 $200,000 $700,000 $41,800,000 Quest Realty income statement is given above. During this year of operation, Quest Realty owned and occupied an office building in downtown Indianapolis. For this year, the building could have been leased to other businesses for $2,000,000 in lease income. Quest Realty also owned undeveloped land valued at $15,000,000. Owners of Quest Realty can earn a 14% rate of return annually on funds invested elsewhere. a. Calculate total explicit costs of using market-supplied resources for Quest Realty for this year b. Calculate total implicit costs of using owner-supplied resources for Quest Realty for this year c. Calculate Quest's accounting profit d. Calculate Quest's economic profit

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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