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Barney decides to quit his job as a corporate accountant, which pays $15,000 a month, and goes into business for himself as a certified public accountant.
He runs his business from his converted garage apartment, which he could rent out for $315 a month if he wasn’t using it as a home office. He must purchase office supplies worth $60 a month, and his monthly electricity bill has increased by $40 now that he is working out of his home office.
After six months of working from home, Barney has earned an average of $17,000 per month.
Instructions: Enter your answers as a whole number.
a. What are Barney’s average monthly accounting profits?
$
b. What are Barney’s average monthly economic profits?
$
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- Barney decides to quit his job as a corporate accountant, which pays $12,000 a month, and goes into business for himself as a certified public accountant. He runs his business from his converted garage apartment, which he could rent out for $315 a month if he wasn’t using it as a home office. He must purchase office supplies worth $85 a month, and his monthly electricity bill has increased by $40 now that he is working out of his home office. After six months of working from home, Barney has earned an average of $17,000 per month. Instructions: Enter your answers as a whole number. a. What are Barney’s monthly explicit costs? $ b. What are Barney’s monthly implicit costs? $ c. What are Barney’s monthly economic costs? $Barney decides to quit his job as a corporate accountant, which pays $14,000 a month, and goes into business for himself as a certified public accountant. He runs his business from his converted garage apartment, which he could rent out for $320 a month if he wasn’t using it as a home office. He must purchase office supplies worth $70 a month, and his monthly electricity bill has increased by $50 now that he is working out of his home office. After six months of working from home, Barney has earned an average of $16,000 per month. Instructions: Enter your answers as a whole number. a. What are Barney’s monthly explicit costs? $ b. What are Barney’s monthly implicit costs? $ c. What are Barney’s monthly economic costs? [i need a,b,c answer i will 5 upvotes]Dina is working for a consulting firm making $60,000 per year but considers starting her own consulting company. Dina has determined that to launch the business, she needs to invest $100,000 of her own funds. The annual cost of running the business will include $70,000 for the rent of the office space, $210,000 for employee wages, and $5,000 for materials and utilities. Dina plans to manage the business, which means that she will have to quit her current job. Suppose that the interest rate (or rate of return) on investments in the economy is 6%. Dina's total implicit cost per year is . Dina's total cost per year is .
- Sam decides to quit his job as a corporate accountant, which pays $11,000 a month, and goes into business for himself as a certified public accountant. He runs his business from his converted garage apartment, which he could rent out for $305 a month if he wasn’t using it as a home office. He must purchase office supplies worth $70 a month, and his monthly electricity bill has increased by $50 now that he is working out of his home office. After six months of working from home, Sam has earned an average of $13,000 per month. a. What are Sam’s average monthly accounting profits? $ b. What are Sam's average monthly economic profits? $Susan Jones has a job as a pharmacist earning $45,000 per year, and she is deciding whether to take another job as the manager of another pharmacy for $55,000 per year or to purchase a pharmacy that generates revenue of $350,000 per year. To purchase the pharmacy, Susan would have to use her $20,000 savings and borrow another $90,000 at an interest rate of 8% per year. The pharmacy that Susan is contemplating purchasing has additional expenses of $100,000 for prescription and non-prescription drugs and lines of women’s and men’s personal hygiene products and cosmetics; $45,000 for one full time person; $20,000 for one part time person; $12,000 for rent; $2,500 for electricity; $1,300 for natural gas; $1,200 for telecommunications; and depreciation and amortization expenses are $5,500. Assume that income and business taxes are 35% and the repayment of the principal of the loan does not start before three years. Also assume that revenue is expected to grow at 5% per year and expenses at…You are considering opening a small flower store. You anticipate that you will earn $100,000 each year in revenue. It will cost you $30,000 each year to rent the space necessary to run your business. Additionally, you will need to spend $10,000 each year on flower seeds, utilities, and other expenses necessary to operate your flower shop. You have just graduated from college with a degree in economics and have received an offer to work for a firm with a yearly salary of $70,000. What is your anticipated economic profit of opening the flower shop?
- Suppose your current job pays you $300,000 a year. However, you are considering starting your own company. Based upon your research, you estimate your first year total revenue to be $7,500,000. There are however several costs of running the company during this first year, such as the cost of materials which will equal $2,750,000, employees who will receive in total $1,500,000, utilities which will cost $1,200,000, and rent that will be paid to the landlord that equals $1,800,000. A. solve for both your accounting profit and economic profit during this first year. B. based upon these profit values, state whether you are better off starting this company or staying in your current job.Sam quits his job as an airline pilot and opens his own pilot training school. He was earning $40,000 as a pilot. He withdraws $10,000 from his savings where he was earning 6 percent interest and uses the money in his new business. He uses a building he owns as a hanger and could rent it out for $5,000 per year. He rents a computer for $1,200, buys office supplies for $500, rents an airplane for $6,000, pays $1,300 for fuel and maintenance, and hires one worker for $30,000. Sam's total revenue from pilot training classes this year equaled $90,400. Sam's explicit costs this year equals:Gomez runs a small pottery firm. He hires one helper at $12,000 per year, pays annual rent of $5,000 for his shop, and spends $20,000 per year on materials. He has $40,000 of his own funds invested in equipment (pottery wheels, kilns, and so forth) that could earn him $4,000 per year if alternatively invested. He has been offered $15,000 per year to work as a potter for a competitor. He estimates his entrepreneurial talents are worth $3,000 per year. Total annual revenue from pottery sales is $72,000. Calculate the accounting profit and the economic profit for Gomez’s pottery firm.
- Gomez runs a small pottery firm. He hires one helper at $12,000 per year, pays annual rent of $5,000 for his shop, and spends $20,000 per year on materials. He has $40,000 of his own funds invested in equipment (pottery wheels, kilns, and so forth) that could earn him$4,000 per year if alternatively invested. He has been offered $15,000 per year to work as a potter for a competitor. He estimates his entrepreneurial talents are worth $3,000 per year. Total annual revenue from pottery sales is $72,000. Calculate the accounting profit and the economic profit for Gomez’s pottery firm. A. How much is the normal profit? (Use a whole number, no currency, no comma, no spaceGomez runs a small pottery firm. He hires one helper at $12,000 per year, pays annual rent of $5,000 for his shop, and spends $20,000 per year on materials. He has $40,000 of his own funds invested in equipment (pottery wheels, kilns, and so forth) that could earn him$4,000 per year if alternatively invested. He has been offered $15,000 per year to work as a potter for a competitor. He estimates his entrepreneurial talents are worth $3,000 per year. Total annual revenue from pottery sales is $72,000. Calculate the accounting profit and the economic profit for Gomez’s pottery firm. a. How much is the accounting profit? (Use a whole number, no currency, no comma, no space) b. How much is the normal profit? (Use a whole number, no currency, no comma, no space) c. How much is the total explicit cost? (Use a whole number, no currency, no comma, no space) d. How much is the total implicit cost? (Use a whole number, no currency, no comma, no space) e. How much is the economic profit? (Use a…In 1939, the box office records set by Gone with the Wind and The Wizard of Oz proved to Hollywood studios that investing in Technicolor was worth every penny. Nevertheless, a reversal of fortune hit the film industry as the United States entered World War II. Wartime shortages made celluloid nitrate more costly, so Hollywood studios reverted to primarily black and white. The few Technicolor musicals released only recovered their production costs. The graph shows Metro-Goldwyn-Mayer's (MGM) production of Technicolor movies before World War II. Modify the graph to describe the wartime period for MGM. Assume that nothing changes except the items discussed in the question.
