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Jaime owns and manages a caf in Collegetown whose annual revenue is $5,000. Annual expenses are as follows: a. Calculate Jaime's annual accounting profit. $

image text in transcribed Jaime owns and manages a caf in Collegetown whose annual revenue is $5,000. Annual expenses are as follows: a. Calculate Jaime's annual accounting profit. \$ b. Suppose Jaime could earn $1,000 per year as a recycler of aluminum cans, but she prefers to run the caf. In fact, she would be willing to pay up to $275 per year to run the caf rather than to recycle. Is the caf making an economic profit? the caf is making an economic of \$ per year. Should Jaime stay in the cafe business? Yes, she should stay in the caf business. c. Suppose the caf's revenues and expenses remain the same, but recyclers' earnings rise to $1,100 per year. Is the caf making an economic profit? , the caf is making an economic| of \$ per year. Should Jaime stay in the caf business? d. Suppose Jaime had not had gotten a $10,000 loan at an annual interest rate of 10 percent to buy equipment, but instead had invested $10,000 of her own money in equipment. Calculate Jaime's annual accounting profit. \$ e. As in part b, suppose Jaime could earn $1,000 per year as a recycler and she has to pay $1,000 per year in interest on her loan, but, unlike part b, suppose Jaime likes recycling just as well as running the caf. How much additional revenue would the caf have to collect each year to earn a normal profit? \$

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