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BK 022 4 PRINCIPLES OF ECONOMICS 2 In [IHIII'JV 2 Answer ALL the questions below. (:1) Kate runs a small electric cordless chainsaw tree cutting machine factory. He can make 350 electric cordless chainsaw tree cutting machines per year and sell them for RM410 each. It costs Kato RMZDQOD for raw materials to build the 350 electric cordless chainsaw tree cutting machines. Kate has invested RM?95,(I00 in the factory and equipment needed to produce the electric chainsaw tree cutting machines which are now assets that he owns; RM45.000 from his own savings which was earning 296 interest and Eli/1750.000 borrowed at 3.5% interest. To open his own electric cordless chainsaw tree cutting machine factory. Kato would have to quit his current job, where he is earning an annual of RM35,CDD. I"Hint: The RM795, 000 invested in the factory and equipment is not treated as a cost here because they represent assets of the rm, there is however a cost associated with obtaining time funds. Based on the given situation, (i) What is the total revenue Kate can earn in a year? [2 marks] (ii) What are the explicit costs Karo incurs while producing 350 electric cordless Chainsaw tree cutting machines? [2 marks] (iii) What are the total opportunity costs of producing 350 grass cutting machines (explicit and implicit)? [2 marks] BK 022 5 PRINCIPLES OF ECONOMICS 2 (iv) What is the value of Kate's accounting prot? [2 marks] (v) What is the value of Kate's economic prot? [2 marks]