Part 1: Economic Profit (in thousands, except cost of capital rate) Revenue Operating costs: Personnel costs Other costs Operating profit Operating profit before personnel costs (OPBP) Investment (capital) Cost of capital, rate Capital charge Economic profit = Operating profit - Capital charge Part 2: Economic Profit Calculated Using Employee Productivity Number of employees Employee productivity: Operating profit before personnel cost per employee ($400,000/10,000) Capital charge per employee ($50,000/10,000) Employee productivity Less personnel cost per employee ($300,000/10,000) Economic profit per employee = Productivity - Cost Total economic profit, all employees Note: All numbers in thousands except for number of employees $ 500,000 300,000 100,000 100,000 $ 400,000 $1,000,000 0.05 50,000 50,000 10,000 40 5 $ 35 30 5 50,000 Required: Use the above approach and assume a chain of residential care facilities employs 10,000 people, has a cost of capital of 5%, and has the following information (000s): Revenue Operating costs Personnel costs Other costs Operating profit Investment $ 720,000 450,000 170,000 $ 100,000 $1,000,000 Determine the productivity per employee, personnel costs per employee, and economic profit per employee. (Enter your answers in thousands.) Productivity per employee Personnel costs per employee Economic profit per employee