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An individual leaves a collegefaculty, where she was earning $50,000 ayear, to begin a new venture. She invests her savings of $40,000, which were earning
An individual leaves a collegefaculty, where she was earning $50,000 ayear, to begin a new venture. She invests her savings of $40,000, which were earning 6 percent annually. She then spends $25,000 renting officeequipment, hires two students at $18,000 a yeareach, rents office space for $12,000, and has other variable expenses of $38,000. At the end of theyear, her revenues are $225,000.
1.Her accounting profit is $
2.economic profit is $
.
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