What is Amir’s total revenue? Make a table of Amir’s explicit and implicit costs. Calculate Amir’s accounting Calculate Amir’s economic Should Amir continue running the nonprofit or return to his old job? Explain using the concept of economic profit.
Last year, Amir left a job that paid $60,000 to run his own nonprofit, The Utah Valley Bike Project. Part of the nonprofit provides bicycle repairs to general customers at a price of $65. The other part accepts broken bicycle donations. Those who cannot afford a bicycle may volunteer in the shop for 5 hours, where they will be taught basic bike maintenance and help repair some of the donated bicycles. After their 5 hours, they may choose one of the donated bikes to take home.
Amir promised himself that he would only maintain the nonprofit if he could be at least as well off as he was in his prior job. However, as the nonprofit founder and CEO, he wanted to pay himself last. Help Amir determine whether he should continue running the nonprofit.
In the first year, the shop did 3,000 paid repairs. Amir’s production costs for the year included rent, wages, and equipment. He spent $50,000 on rent, and $80,000 total on wages for his four employees. To cover the cost of equipment, Jared used $60,000 of his savings (which was earning 3% interest) and borrowed $20,000 (at an annual interest rate of 5%).
- What is Amir’s total revenue?
- Make a table of Amir’s explicit and implicit costs.
- Calculate Amir’s accounting
- Calculate Amir’s economic
- Should Amir continue running the nonprofit or return to his old job? Explain using the concept of economic profit.
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