Calculate the economic profits of driving range

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Biff owns and operates a golf driving range on land that he also owns. Last year his accountant calculated that his driving range makes $50,000 profits per year. Last year a property management company offered to lease Biff’s land from him for $80,000 per year forever. Calculate the economic profits of Biff’s driving range last year. If the property management company offers the same land lease deal to Biff this year, should he take the deal? Explain why or why not, and use your calculation of Biff’s economic profits in your explanation.

Reference no: EM13996893

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