• Mr. Ahmad has been working for 5 years at XYZ Co. and is currently employed as a senior software engineer. His current/latest benefit package includes the followings; • Current monthly (20-day working) gross salary of $20,000. o %50 extra payment if he works on Saturdays. • One-month (20-day working) paid vacation. • Full coverage family health insurance, which is financially equal to $30,000. • One-month gross salary (based on the latest figure) per year completion as indemnity. His current contract offers a yearly salary increase %5 higher than the inflation rate. The country has a personal income tax scheme of $50,000 tax-exempt, %10 if the yearly gross income is between $50,000 and $100,000, and %20 if it is between $100,000 and $250,000, and finally %30 if it is greater than $250,000. Mr. Ahmad thinks that he has enough experience and should do his own business, opening up his own consulting firm. He estimates that he needs $1,000,000 for starting up his business. He has $400,000 on his investment/savings account, which earns yearly %2 higher than inflation rate and he will use his all savings and get 3-year murabaha (loan) of $600,000 from his financial institution to open up his business. He will pay $200,000 principle each year and the current and next year’s pre-determined financing rates is %25, but it will increase to %30, and %40 in the following years respectively according to the contract. According to his employment contract, if he quits his job before completing 10 years, %50 of his indemnity will be cut. Furthermore, if he starts his business, due to the business nature, he will have 6 days weekly work including Saturdays and based on this, his projected revenues during the 3-year period of operation are $1,500,000, $2,000,000, and $3,000,000. On the other hand, his expected expenses for the first year are as follows: • Monthly total salaries to employed people are $80,000. • Yearly supplies and equipment expenses are $150,000. • He has $600,000 rent contract of 3 years, each year of $200,000 for the office. The rent will be fixed for 3 years. • Monthly total utilities are $5,500. • One-time license and certification from the government is $25,000. • The country has a business income tax scheme of no income tax until $100,000. However, it will be %10 between $100,000 and $250,000 and %20 between $250,000 and $500,000, and %30 if it is greater than $500,000. • Yearly expected inflation rate is %20, 25%, and 30% respectively for the next 3-years. Thus, all expected expenses are projected to increase with inflation rate if not mentioned otherwise. Based on then assumptions and projections given above; a) Calculate the explicit cost of each year for three years of opening up his own business. b) Calculate the implicit cost of each year for three years of opening up his own business. c) Calculate the business profit of each year for three years of opening up his own business. d) Calculate the economic profit of each year for three years of opening up his own business. e) Briefly discuss whether Mr. Ahmad should quit his current job and start his own business based on the three-year projection. f) Raise an argument against your answer in e. What might change the answer you gave in e? Briefly discuss.