Mr Hamba earns a salary of R 650 000 per annum. he invested R 250 000 at a fixed annual interest rate of 15%. He has another R 100 000 investment at a fixed annual rate of 10%. He wants to resign and start his own business so he withdrew the R 250 000. He estimated total revenue is equal to R1 million per annum.

Other expenses include the following:

land and building (R150 000), equipment(R50 000), consultation fee(R20 000), labour(R100 000), water and electricity(70 000), sundry expenses(25 000)

a. Calculate total impicit cost,

b. calculate total explicit cost,

c. calculate total cost,

d. calculate total profit or loss.

As an economic advisor would you recommend Mr Hamba to quit his job and continue with his new business idea ? why?