Calculate economic profits:

Assignment Help Operation Management

Reference no: EM131806485

Calculate Economic Profits:

X owns and operates a small business that provides economic consulting services. During the year he spends $40,000 on travel to clients and other expenses, and the computer that he owns depreciates by 5,000. If he didn’t use the computer, he could sell it and earn yearly interest of 200 on the money created through this sale. X’s total revenue for the year is $95,000. Instead of working as a consultant for the year, he could teach economics at a small local college and make a salary of $60,000.

a. What is X’s accounting profit?

b. What is X’s economic profit?

c. Should X continue working as a consultant, or should he teach economics instead? Teaching economics.

Reference no: EM131806485

Questions Cloud

What rate of return did the businessmen obtain : A group of businessmen formed a partnership to buy and race an Indianapolis-type racing car. They agreed to pay an individual $50,000 for the car.

What is the constant beginning-of-month payment : One option is to pay off the debt in constant amounts at the beginning of each month over the next 10 years at a nominal annual interest rate of 10%.

What are your memories of math in elementary school : What are your memories of math in elementary school, middle school, high school, college? How do you view the use of math in daily existence?

Define quarterly rate of return and an effective annual rate : A student organization, at the beginning of the fall quarter, bought and operated a soft-drink vending machine as a means of helping finance its activities.

Calculate economic profits: : Calculate Economic Profits: Should X continue working as a consultant, or should he teach economics instead?

Compute the variable overhead spending variances : During the current quarter, the company operated at 70% of capacity and produced 40,600 units of product; Compute the variable overhead spending variances

List one activity you could utilize for each math practice : What is the importance of the mathematical practice as it pertains to student learning. List one activity you could utilize for each math practice.

Calculate value creation from acquisition : Calculate value creation from acquisition. What is the value creation to Apple from this acquisition deal?

Calculate accounting break-even and cash break-even points : In each of the following cases, calculate the accounting break-even and the cash break-even points. Ignore any tax effects in calculating the cash break-even.

User Account

All Pages