You are the owner and only employee of a company that sets odds for sporting events. Last year you earned a total revenue of $100,000. Your costs for rent and supplies were $50,000. To start this business you invested an amount of your own capital that could pay you a return of $20,000 a year. During the year your economic costs were: $50,000 O $60,000 O $20,000 O $70,000

You are the owner and only employee of a company that sets odds for sporting events. Last year you earned a total revenue of $100,000. Your costs for rent and supplies were $50,000. To start this business you invested an amount of your own capital that could pay you a return of $20,000 a year. During the year your economic costs were: $50,000 O $60,000 O $20,000 O $70,000

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Q: You earned last year 52,000, had interest income of 170, educator expenses of 800 dividend income of…

A: Gross income is total income earned including earnings and income from interest and income from…

Q: chester owns a tanning salon that is expected to produce annual cash flows forever. the tanning…

A: A perpetuity is a cash flow that goes on forever. In other words, the cash flows occur for an…

Q: With a $100,000 investment in a new injection moulding machine, A-Design Inc., a company…

A: Given: Operating income = $36,000 Interest expenses = $5,000 Tax rate = 25%

Q: d) You want to retire in 45 years with $1 million in the bank. You think you can get an average of…

A: Time value of money (TVM) is used to measure the value of money at different point of time in the…

Q: Tom Scott is the owner, president, and primary salesperson for Scott Manufacturing. Because of this,…

A: The cash flows indicate the inflows and outflows of cash. Cash flows are critical to the company's…

Q: I need to create a buiness plan for Edward Jones about how to reach 26 million in 5 years and here…

A: The vision for this business plan is to grow the assets under management to $26 million in 5 years.…

Q: A real estate investor has come to you with a deal for a property which would cost $400,000 &…

A: In capital planning, IRR is frequently used to assess the financial viability of long-term…

Q: you invested 10,000 dollars into a business venture. One year later you realized a profit of $1,400.…

A: The annual rate of return is the rate of earning the profits on a certain invested amount for a…

Q: Mike invested $2000 in gold and a company working on prosthetics. Over the course of the investment,…

A: Simple interest refers to the amount of interest that is paid by the borrower to the lender for…

Q: Compute the internal rate of return. Round your answers to whole percentage value

A: Internal Rate of Return: It is the rate at which a project's net present value becomes zero. This…

Q: Tom Scott is the owner, president, and primary salesperson for Scott Manufacturing. Because of this,…

A: Given:EBIT for a 40-hour week: $555,000EBIT for a 50-hour week: $635,000Company's worth: $3.25…

Q: A certain company manufactures plastic parts for air conditioners. If the company invested $2.6…

A: A rate of return is the net gain or loss of an investment over a specified period of time and…

Q: Joan owns a tanning salon that is expected to produce annual cash flows forever. The tanning salon…

A: Solution:When periodic amounts at received every period, which grows at constant rate forever, it is…

Q: On the internet and in the news you see many articles on non-profit companies and their contribution…

A: A non-profit organization is normally treated as a normal corporate corporation, with the added…

Q: I would like to expand my business by creating a new production line. Today, I hired a consultant to…

Q: THE INFORMATION FOR PROBLEMS 17-20 ARE THE SAME. HOWEVER, EACH QUESTIONS ASKS YOU TO DO SOMETIHNG…

A: 1. Statement of Retained Earnings - Statement of retained earnings is the accumulated profit…

Q: After working for years in her small business. Dr Ewere was finally making money. Since she was…

A: The future value of $185,750 for Dr. Ewere would be computed using the following formula: - Future…

Q: Today is December 31, 2018. Today, we started the Hilo Tourism Company. To start the business, the…

A: The financial statements of a firm need to be prepared at the end of each accounting period. The…

Q: Last year your construction company had operating revenues of $1,240,000, operating costs of…

A: Taxable income refers to the gross income after deducting all the expenses incurred by an…

Q: You invested $2,500 in Awesome Software, Inc. The company did well that year, and you received a…

A: rate of return = ( Total income / Initial Investment ) * 100

Question

You are the owner and only employee of a company that sets odds for sporting events. Last
year you earned a total revenue of $100,000. Your costs for rent and supplies were $50,000. To
start this business you invested an amount of your own capital that could pay you a return of
$20,000 a year.
During the year your economic costs were:
$50,000
O $60,000
O $20,000
O $70,000

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Economic Costs

VIEW

Step 2

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

To help expand his business to new locations, the owner of LaRusso Autos has set aside $3,900 at the end of every 6 months for 5 years. He then deposited $3,100 at the end of every year for the following 7 years. Suppose these savings earned interest at 8.1% compounded semi-annually over the entire time of the investment. How much has LaRusso Autos accumulated at the end of the 12 years? I need the solutions in excel form, thank you
How do I work this problem in excel? You have been offered $3,000 in 4 years for providing $2,000 today into a business venture with a friend. If interest rates are 10%, is this a good investment for you?
You are an employee of University Consultants, Limited, and have been given the following assignment. You are to present an investment analysis of a small retail income-producing property for sale to a potential investor. The asking price for the property is $1,360,000; rents are estimated at $174,080 during the first year and are expected to grow at 2.5 percent per year thereafter. Vacancies and collection losses are expected to be 10 percent of rents. Operating expenses will be 35 percent of effective gross income. A fully amortizing 70 percent loan can be obtained at 6 percent interest for 30 years (total annual payments will be monthly payments × 12). The property is expected to appreciate in value at 3 percent per year and is expected to be owned for five years and then sold. Required: a. What is the first-year debt coverage ratio? b. What is the terminal capitalization rate? c. What is the investor’s expected before-tax internal rate of return on equity invested (BTIRR)? d.…
I need this question completed in 10 minutes
Brian owns a tanning salon that is expected to produce annual cash flows forever. The tanning salon is worth $636,600.00 and the cost of capital is 6.40%. Annual cash flows are expected with the first one due in one year and all subsequent ones growing annually by 2.30%. What is amount of the annual cash flow produced by the tanning salon in 1 year expected to be? O $55,384.20 (plus or minus $10) O $26,100.60 (plus or minus $10) O $155,268.29 (plus or minus $10) O $15,526,829.27 (plus or minus $10)
Coming Up Roses has grown into a very successful business and you have just received an offer from someone to purchase the business from you for $1.2 million. The potential buyer has offered you $400,000 at the time of sale, $600,000 at the end of the growing season, in 6 months, and the balance, $200,000 in 1.5 years from now. What is the present value of this offer if you could invest at 6% compounding monthly?
THE INFORMATION FOR PROBLEMS 17-20 ARE THE SAME. HOWEVER, EACH QUESTIONS ASKS YOU TO DO SOMETIHNG ELSE WITH THE INFORMATION. Today is December 31, 2018. Today, we started the Hilo Tourism Company. To start the business, the owners have invested $25,000 into the business from their own pocket. In addition, the company borrowed $15,000 at a 10 percent simple interest rate. Thus, the company has $40,000 to work with. The company will use $10,000 of this money for operating cash. The company will use the remaining money to purchase a tourism van for $30,000 on December 31st. The company will pay interest only on the loan. The Hilo Tourism Company will contract our services to Royal Cruise Line who has agreed to pay us $160,000 in the year 2019 for providing tours to high-class customers from the Hilo dock to the Volcano. All sales are cash sales. Hilo Tourism Company will have the following expenses in the year 2019. The van will wear out by $5,000 per year. Insurance will cost $12,000 per…