What are the economic profits for the greener way

Assignment Help Business Economics

Reference no: EM131009959

The revenues and costs of The Greener Way, a lawn care business wholly owned by Mr. Albert Johnston are listed below. Lawn Mowing $63,000 Aeration $2,000 Labour Cost $30,000 Vehicle Costs $15,000 Lawnmower Maintenance $5,000 Debt-Service Costs $13,000

a) What is The Greener Way’s accounting profit?

b) Suppose Mr. Johnston has $63,000 of capital invested in The Greener Way. Also suppose that the current return on an equally risky investment is 7%. What is the opportunity cost of Mr. Johnston’s capital?

c) What are the economic profits for The Greener Way?

d) If The Greener Way’s profits were typical of lawn care companies in 2014, what would you expect to happen to this industry? Explain.

Reference no: EM131009959

Questions Cloud

Artificial intelligence corporation has two divisions : The "Artificial Intelligence (AI) Corporation" has two divisions: Manufacturing and Sales. When a new worker is hired both she and her supervisor are equally ignorant about her ability. There is no skill involved in making and marketing AI robots; ho..

Drastic cost reductions : In December 1998, after a year in which Asian demand for B.C. lumber had fallen dramatically, an article in The Globe and Mail had the following headline: “Drastic Cost Reductions Needed to Save 13 B.C. Sawmills”. Does this headline suggest that B.C...

Draw supply and demand diagram for the corn market : Consider the perfectly competitive Corn industry. It is initially in long run equilibrium at quantity Q0 and price P0. Draw a supply and demand diagram for the Corn market showing this equilibrium. Draw a diagram for a typical firm in its initial lon..

What are the economic profits for the greener way : The revenues and costs of The Greener Way, a lawn care business wholly owned by Mr. Albert Johnston are listed below. Lawn Mowing $63,000 Aeration $2,000 Labour Cost $30,000 Vehicle Costs $15,000 Lawnmower Maintenance $5,000 Debt-Service Costs $13,00..

What is the equilibrium market price the store will charge : A grocery store in a small town has a supply curve for oranges that is given by the equation P=1/10Q+1. The store faces a weekly demand curve for oranges given by P=16-2/5Q where price is measured in dollars and quantity is measure in bags of oranges..

Midwestern states experience unusually poor weather : Suppose the Corn producers throughout the Midwestern states experience unusually poor weather and so produce a smaller than normal harvest. Explain using a diagram how this harvest will affect Canadian Corn farmers?

Example of farmer and railroad tracks to explain bargaining : Ronald Coase used the example of a farmer and railroad tracks to explain bargaining. Sparks from trains running on tracks near farmland have the potential to set off fires in the fields. Consider the case where the law stipulated that railroads could..

Preferences stay constant across time : When the Smith family lived in Japan they consumed 4 lbs of rice per week and 2 lbs of potatoes per week. When the Smith family lived in Germany their consumption drastically changed to 4 lbs of potatoes per week and 2 lbs of rice per week. Although ..

User Account

All Pages