Question
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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