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Jawadowns and manages a caf in Collegetown whose annual revenue is $5000.Annual expenses are asfollows. Labor $2000 Foodanddrink 500 electricity 100 Vehicle lease 150 Rent

Jawadowns and manages a caf in Collegetown whose annual revenue is $5000.Annual expenses are asfollows.

Labor

$2000

Foodanddrink

500

electricity

100

Vehicle lease

150

Rent

500

Interestofloan

1000

a) CalculateJawad'sannualaccountingprofit.

b)Jawadcouldearn$1000asarecyclerofaluminumcans.Isthecafmakinganeconomic profit?ShouldJawadstayinthecafbusiness?

c)Supposethatthecaf'srevenuesandexpensesremainthesame,butrecycler'searningsarereducedto$700peryear.

Explain whatthesituation wouldbenow.

d)SupposeJawaddidnothavetogeta$10000loanatanannualinterest of10%,butinsteadhadinvestedhisownmoney.Analyze thesituationnow.

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