Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

(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

image text in transcribed
image text in transcribed
(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

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Essentials Of Business Law

Authors: Jeffrey F Beatty, Susan S Samuelson

3rd Edition

0324537123, 9780324537123

More Books

Students also viewed these Economics questions

Question

What is the cause of the aurora borealis (northern lights)?

Answered: 1 week ago