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Jill Johnson s dream was always to open her own pizza restaurant. Finally, she decided to take the plunge. She quit her job, and took

Jill Johnsons dream was always to open her own pizza restaurant. Finally, she decided to take the
plunge. She quit her job, and took $20,000 of her retirement savings to start her restaurant. She leased
space, purchased pizza ovens, hired workers, and started making pizza. Her total sales in year 1 were
$160,000.
Pizza dough, tomato sauce, other ingredients $20,000
Wages 48,000
Interest payments on loan to buy pizza ovens 10,000
Electricity and other utilities 6,000
Lease payment for store 24,000
Foregone salary 30,000
Foregone interest 3,000
Depreciation 10,000
What is her accounting profit? _______________
What is her economic profit?

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