The sole proprietor of the FM2 Financial Services, Bondo, receives all accounting profits earned by her firm and a K28,000-a-year salary she pays herself. It is noteworthy that she also has a standing salary offer of K35,000 a year if she agrees to work for Bank of Zambia. If she had invested her capital outside her own company, she estimates that would have made a return of K22,000 a year. Further, information has reached you that last year, Bondo’s accounting profit was K50,000. Calculate her economic profit?
The sole proprietor of the FM2 Financial Services, Bondo, receives all accounting profits earned by her firm and a K28,000-a-year salary she pays herself. It is noteworthy that she also has a standing salary offer of K35,000 a year if she agrees to work for Bank of Zambia. If she had invested her capital outside her own company, she estimates that would have made a return of K22,000 a year. Further, information has reached you that last year, Bondo’s accounting profit was K50,000. Calculate her economic profit?
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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The sole proprietor of the FM2 Financial Services, Bondo, receives all
accounting profits earned by her firm and a K28,000-a-year salary she pays herself. It
is noteworthy that she also has a standing salary offer of K35,000 a year if she agrees
to work for Bank of Zambia. If she had invested her capital outside her own company,
she estimates that would have made a return of K22,000 a year. Further, information
has reached you that last year, Bondo’s accounting profit was K50,000. Calculate her
economic profit?
Transcribed Image Text:The sole proprietor of the FM2 Financial Services, E
ting profits earned by her firm and a K28,000-a-year
worthy that she also has a standing salary offer of K3:
k for Bank of Zambia. If she had invested her capital
imates that would have made a return of K22,000 a ye
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