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(3 marks) Amanpreet and Denise are operating identical businesses. Each has revenue of $400,000 and non-interest costs of $160,000. Equipment required for the business costs
(3 marks) Amanpreet and Denise are operating identical businesses. Each has revenue of $400,000 and non-interest costs of $160,000. Equipment required for the business costs $800,000. Each person uses their net worth, and borrowed funds, to obtain that amount. The interest rate to borrow or save is 10%. Amanpreet's net worth is $600,000, while Denise's is $200,000. In alternative employment, Amanpreet can earn $180,000 and Denise $140,000. a) (2) Calculate each person's economic prot as a result of operating their business. b) (1) What should each person do, to maximize their income
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