An owner can lease her building for $100,000 per year for three years. The explicit cost of

Question:

An owner can lease her building for $100,000 per year for three years. The explicit cost of maintaining the building is $35,000, and the implicit cost is $50,000. All revenues are received, and costs are borne, at the end of each year. If the interest rate is 4 percent, determine the present value of the stream of:
a. Accounting profits.
b. Economic profits.