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Economics:

10th Edition
BOYES + 1 other
Publisher: Cengage Learning
ISBN: 9781285859460

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BuyFindarrow_forward

Economics:

10th Edition
BOYES + 1 other
Publisher: Cengage Learning
ISBN: 9781285859460
Chapter 23, Problem 5E
Textbook Problem
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Use the following information to calculate accounting profit and economic profit:

Sales $100
Employee expenses $40
Inventory expenses $20
Value of owner’s labor in any other enterprise $40

To determine

Accounting profit and economic profit is to be determined.

Explanation of Solution

Given:

Sales =$100

Employee expenses= $40

Inventory expenses= $20

Opportunity cost(value of labor in any other enterprise) = $40

Accounting Profit = Sales - (employee expenses+ inventory ...

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