Question
Jason is considering building his own on-line business. In order to reach his objective, Jason needs to install a set of multimedia computer and its
Jason is considering building his own on-line business. In order to reach his objective, Jason needs to install a set of multimedia computer and its internet connection. A computer with the appropriate specs is estimated to cost him Rp 20 million. Jason also estimates that the monthly cost of subscribing for internet connection is Rp 1 million. In addition, he also estimates that he needs to allocate Rp 1 million each month for electricity charges. Jason also considers to run his business from his own kiosk that he formerly leases it and, thus, gives him an annual rental income of Rp 10 million. Since this is a new business venture that needs total devotion, Jason thinks of quitting from his current job that pays him a monthly salary of Rp 20 million. Jason estimates that the new business venture will enable him to sell 2,000 pieces of his merchandise per month with a price of Rp 10 thousand per piece.a. Calculate Jason's accounting profit and economic profit. Also, explain the difference between the two concepts.b. What decision should Jason take? Remaining in his current job or starting his own business? Explain.
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