Question
in 2013 Terry brady, the legendary athlete from indiana, decided to leave his job as head fotball caoch at Mattoon High School to open Brady
in 2013 Terry brady, the legendary athlete from indiana, decided to leave his job as head fotball caoch at Mattoon High School to open Brady Advantage, his own sporting goods store, in Terre Haute. by locating Brady Advantage halfway between St. Louis and Indianapolis, Brady hoped to attract customers from both large metropolitan markets. A partial income statement for Brady Advantage follows 2013 revineues Revenue from sales of goods and services $210,000 Operating costs and expenses Cost of products and services sold $82,000 Selling expenses $6,000 Administration Expenses $12,000 Total Operating costs and expenses $100,000 Income from Operation $110,000 Interest Expense (bank Loan) $14,000 Non-recurring expenses to start business $8000 Income Taxes $16000 Net Income $72,000 Terry Brady's coaching job at Mattoon High school paid $45,000 of annual salary and benefits. To get the sporting goods store opened, brady used $50,000 of his personal saving, which was earning a guaranteed 12 Percent annual rate of return. Brady opened his store in a building that owned in Terre Haute. Prior to opening his store, the building was rented for $24,000 per year. answer the following and show how you get the answer. a) In 2013, Brady Advantage incurs $_________________ of total explicit costs for using market- supplied resources. b) in 2013, the opportunity cost of Brady's equity capital is $___________. c) The total implicit cost of using owner-supplied resources in 2013 is $ _____________. d) the total opportunity cost of resources used by Brady Advantage in 2013 is $______________. The Total economic costs in 2013 is $____________. e) The accounting profit for Brady Advantage in 2013 is $____________. f) Based on his profit in 2013, did Terry Brady increase his wealth by quitting his Job at Mattoon High School and opening Brady Advantage? Expain your answer carefully [hint: compute economic profit in 2013].
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