Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Last year, Jarod left a job that pays $80,000 to run his own bike-repair shop. Jarod's shop charges $65 for a repair, and last year

Last year, Jarod left a job that pays $80,000 to run his own bike-repair shop. Jarod's shop charges $65 for a repair, and last year the shop performed 5,000 repairs. Jarod's production costs for the year included rent, wages, and equipment. Jarod spent $60,000 on rent and $120,000 on wages for his employees. Jarod keeps whatever profit the shop earns, but does not pay himself an official wage. Jarod borrowed $30,000 for the shop's equipment at an annual interest rate of 4 percent.

(A) What is Jarod's accounting profit?

(B) What is Jarod's economic profit?

Round your answers to the nearest dollar and include a negative sign if appropriate.

Step by Step Solution

3.40 Rating (147 Votes )

There are 3 Steps involved in it

Step: 1

Required solution is given below Total Revenue from the shop 500... 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

Step: 3

blur-text-image

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

Discovering Advanced Algebra An Investigative Approach

Authors: Jerald Murdock, Ellen Kamischke, Eric Kamischke

1st edition

1559539844, 978-1604400069, 1604400064, 978-1559539845

More Books

Students also viewed these Accounting questions