Question
An entrepreneur has several independent business interests with limited time and financial resources. One year ago, she closed a profitable consulting practice to focus on
An entrepreneur has several independent business interests with limited time and financial resources. One year ago, she closed a profitable consulting practice to focus on opening a bridal store. At the time the consulting business was closed, it had generated an annual profit of $120,000. To start the bridal store, she borrowed $30,000. During the most recent year, the store recorded revenue of $200,000, operating expenses (cash outlay) of $90,000, depreciation of $10,000, and loan interest of $3,000. Which of the following statements best describes both the accounting and the economic profits of the bridal store?
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