Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Dolores used to work as a high school teacher for $55,000 per year but quit in order to start her own catering business. To buy

Dolores used to work as a high school teacher for $55,000 per year but quit in order to start her own catering business. To buy the necessary equipment, she withdrew $30,000 from her savings (which paid 2 percent interest per year) and borrowed $30,000 from her uncle, to whom she pays 3 percent interest per year. Last year she paid $25,000 for ingredients and had revenue of $75,000. She asked Louis, an accountant, and Greg, an economist, to calculate her profit for her. What did they say?

a.Louis said her profit was $49,100, and Greg said she lost $6500.

b.Louis said her profit was $49,100, and Greg said her profit was $6500.

c.Louis said her profit was $50,000, and Greg said she lost $5000.

d.Louis said her profit was $450,000, and Greg said her profit was $33,500.

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_2

Step: 3

blur-text-image_3

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

Understanding Econometrics With Economic Applications

Authors: Dennis Halcoussis

1st Edition

0030348064, 9780030348068

More Books

Students also viewed these Economics questions