Charles uses $40,000 from his savings to buy the equipment necessary to open a doughnut shop. The interest on his savings was 5% a year. He spends $25,000 on supplies (year) and pays $10,000 /year in rent. He quits his $25,000/ year job to work in his shop. Total Revenue = 40,000 Calculate: a. Accounting profit _____________

b. Economic Profit_____________

c. Does he earn enough accounting profit to cover his implicit costs?