1) A firm had sales revenue of $1 million last year. It spent $600,000 on labor, $150,000 on capital and

$200,000 on materials. The firm's factory sits on land owned by the firm that could be rented out for

$30,000 per year. What was the firm's economic and accounting profits last year?

2) In question 1 calculate the firm's accounting and economic profits, if the firm decided to get a bank

loan with 2% interest rate to cover all the firm's expenses.

3) In question 1, calculate the firm's accounting and economic profits, if the firm's owners paid all firm's expenses from their personal saving account with 5% APR.