Westonci.ca is the premier destination for reliable answers to your questions, brought to you by a community of experts. Join our platform to connect with experts ready to provide detailed answers to your questions in various areas. Connect with a community of professionals ready to provide precise solutions to your questions quickly and accurately.
Sagot :
Under these circumstances, the annual interest rate is 6 percent, and Kieran's accounting profit from his bike shop is $60,000. Kieran’s economic profit is $4000.
Total potential cost is equal to wage plus interest not paid, which comes to 50,000 + 6% of 100,000, or 50,000 + 6000, or 56,000.
Total revenue received = 60,000
Consider the formula for economic profits: revenue - (implicit + explicit cost).
Furthermore, that Implicit Cost = Opportunity Cost = 56,000.
Implicit cost = 0 (from the question, revenue covered it)
Economic profit, thus, equals $60,00 - $56,000, or $4,000.
- The difference between the money made from selling an output and the price of all the inputs plus any opportunity costs is what is known as an economic profit or loss. Economic profit is determined by subtracting opportunity costs and explicit costs from earned income.
- Opportunity costs are a kind of implicit cost that management determines and that vary depending on various events and viewpoints.
Learn more about Economic profit, here
https://brainly.com/question/15699405
#SPJ4
Thanks for using our platform. We're always here to provide accurate and up-to-date answers to all your queries. Thanks for using our service. We're always here to provide accurate and up-to-date answers to all your queries. We're here to help at Westonci.ca. Keep visiting for the best answers to your questions.
