Although Goldman Sachs paid Heather $100,000.00 per year, she was not satisfied with her job. She had loved going white-water rafting and skiing with her family in Utah since she was a little girl. So last year, she decided to open her own business: Family Adventures. During the summer, she takes families on different white-water trips, and in the winter, she leads clients on skiing trips. To start her business, Heather borrowed $100,000 from a bank and used $110,000.00 of her savings. Her savings earned 10% interest. At the end of the year, she wanted to know whether her new business venture was worthwhile. The table below lists her total revenue and itemized costs for Family Adventures Item Total revenue Employee wages Rent on her business office Payments on bank loan Utility and gas expenses 2nd attempt Part 1 Annual Dollar Value $280,000.00 $140,000.00 $25,000.00 $10,000.00 $5,000.00 Family Adventures' accounting profit was $ Part 2 Family Adventures' economic profit was $ (If the economic profit is less than zero, be sure to include the sign) See Hint See Hint

Although Goldman Sachs paid Heather $100,000.00 per year, she was not satisfied with her job. She had loved going white-water rafting and skiing with her family in Utah since she was a little girl. So last year, she decided to open her own business: Family Adventures. During the summer, she takes families on different white-water trips, and in the winter, she leads clients on skiing trips. To start her business, Heather borrowed $100,000 from a bank and used $110,000.00 of her savings. Her savings earned 10% interest. At the end of the year, she wanted to know whether her new business venture was worthwhile. The table below lists her total revenue and itemized costs for Family Adventures Item Total revenue Employee wages Rent on her business office Payments on bank loan Utility and gas expenses 2nd attempt Part 1 Annual Dollar Value $280,000.00 $140,000.00 $25,000.00 $10,000.00 $5,000.00 Family Adventures' accounting profit was $ Part 2 Family Adventures' economic profit was $ (If the economic profit is less than zero, be sure to include the sign) See Hint See Hint

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter2: Fundamental Economic Concepts

Section: Chapter Questions

Problem 4E

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