The table below provides the total revenues and costs for a small landscaping company in a recent year.Total Revenues ($)250 000Total Costs ($)wages and salaries150 000- risk-free return of 2% on owner's capital of $20 000400- interest on bank loan1500cost of supplies27 000depreciation of capital equipment8000- additional wages the owner could have earned in next best alternative30-000800- risk premium of 4% on owner's capital of $20 000a.Refer to Table calculate explicit costs for this firm?b.Refer to Table calculate implicit costs for this firm?C.Refer to Table, what is the accounting profits for this firm are?d.Refer to Table, calculate he economic profits for this firm?

a. Explicit costs are resulted from the production process or these are direct costs of the…

a. Refer to Table calculate explicit costs for this firm? b. Refer to Table calculate implicit costs for this firm? C. Refer to Table, what is the accounting profits for this firm are? d. Refer to Table, calculate he economic profits for this firm?

a. Refer to Table calculate explicit costs for this firm? b. Refer to Table calculate implicit costs for this firm? C. Refer to Table, what is the accounting profits for this firm are? d. Refer to Table, calculate he economic profits for this firm?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

The table below provides the total revenues and costs for a small landscaping company in a recent year.
Total Revenues ($)
250 000
Total Costs ($)
wages and salaries
150 000
- risk-free return of 2% on owner's capital of $20 000
400
- interest on bank loan
1500
cost of supplies
27 000
depreciation of capital equipment
8000
- additional wages the owner could have earned in next best alternative
30-000
800
- risk premium of 4% on owner's capital of $20 000
a.
Refer to Table calculate explicit costs for this firm?
b.
Refer to Table calculate implicit costs for this firm?
C.
Refer to Table, what is the accounting profits for this firm are?
d.
Refer to Table, calculate he economic profits for this firm?

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