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1. List the explicit costs and then list the implicit costs . Be sure to properly LABEL them so that I can give partial credit if you make a mistake. 2. For the year, his accounting profit (or loss) is profit (or loss) is and his economic 3. Did he make an economic profit an economic loss or did he break even What does his economic profit, breakeven, or economic loss result mean=

1. List the explicit costs and then list the implicit costs . Be sure to properly LABEL them so that I can give partial credit if you make a mistake. 2. For the year, his accounting profit (or loss) is profit (or loss) is and his economic 3. Did he make an economic profit an economic loss or did he break even What does his economic profit, breakeven, or economic loss result mean=

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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1. List the explicit costs and then list the implicit costs. Be sure to properly LABEL them so that I can give partial credit if you make a mistake. 2. For the year, his accounting profit (or loss) is and his economic profit (or loss) is 3. Did he make an economic profit an economic loss or did he break even? What does his economic profit, breakeven, or economic loss result mean?
Transcribed Image Text:1. List the explicit costs and then list the implicit costs. Be sure to properly LABEL them so that I can give partial credit if you make a mistake. 2. For the year, his accounting profit (or loss) is and his economic profit (or loss) is 3. Did he make an economic profit an economic loss or did he break even? What does his economic profit, breakeven, or economic loss result mean?
Thomas, a highly successful manager, quit his job in a large retail store so that he could start his own practice. He has been in his own business for a little over one year. He has a building and pays $50,000 mortgage payments. He took out $300,000 which he had in a Time Deposit (CD) that was making 10% a year and put it in his checking account that is making 0% interest, He will use that money for the explicit cost expenses he has for his new business which you will see in this problem. He must pay $3,000 a year in property taxes. He hired a contract software developer to write an inventory software system for $100,000 for the year. His revenues in the first year were $500,000. Thomas earned $170,000 he was with that large retail firm. He also got a free company car worth $30,000 and $30,000 a year in profit sharing that last year. His advertising for his first year came to $10,00O. His electricity and gas usage came to $10,000 for the year.
Transcribed Image Text:Thomas, a highly successful manager, quit his job in a large retail store so that he could start his own practice. He has been in his own business for a little over one year. He has a building and pays $50,000 mortgage payments. He took out $300,000 which he had in a Time Deposit (CD) that was making 10% a year and put it in his checking account that is making 0% interest, He will use that money for the explicit cost expenses he has for his new business which you will see in this problem. He must pay $3,000 a year in property taxes. He hired a contract software developer to write an inventory software system for $100,000 for the year. His revenues in the first year were $500,000. Thomas earned $170,000 he was with that large retail firm. He also got a free company car worth $30,000 and $30,000 a year in profit sharing that last year. His advertising for his first year came to $10,00O. His electricity and gas usage came to $10,000 for the year.
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