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Mali quit his former $80,000 per year job and took $200,000 out of an investment fund that had average annual growth of 10%. He used
Mali quit his former $80,000 per year job and took $200,000 out of an investment fund that had average annual growth of 10%. He used the money to start a new restaurant business. The restaurant had the following financial results in its first year:
Sales Revenue: $500,000
Cost of Food and Drink 200,000
Salaries 100,000
Other Expenses 75,000
Calculate the i) accounting profit and economic profit and ii) should Mali stay in the restaurant business? Explain.
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