A year ago, Shani graduated from college and decided to open her own software company. Over the past year, her start-up has generated $500,000 worth of revenue. She hired two software engineers and paid each of them $150,000 over the past year. She also purchased web-hosting services that cost a total of $30,000. In order to save money, Shani decided to run the business out of the basement of her house. Previously, she had rented this space out to a tenant for $6,000 per year. Instead of opening her own business, she could have gone to work for Microsoft and earned $200,000 over the past year.

a. How much were the accounting profits for Shani’s business over the past year? 

b. How much were her economic profits over the past year? 

c. Given this information, should Shani have launched her own business?