Question 5 (a) Peter's father gave him a construction company with an asset worth RM400,000. Peter proudly told to some of his fellow directors that his revenues were Not yet typically RM35,000 per month, while his operating cost for fuel was RM8,000 and maintenance RM5,000 per month. The estimated depreciation was RM10,000 per answered month. An office space similar to Peter's office space can be rented for RM15,000 per month. If Peter was working for one of his competing construction Marked out of companies, he would have earned RM5,000 per month. 100 (1) List the items that Peter would consider to compute his explicit costs. Flag question (ii) List the items that Peter would consider to compute his implicit costs. (ili) Compute Peter's monthly total economic cost. (iv) Should Peter continue his business? Support your answer with calculations. (8 Marks) (b) Offshore Petroleum's fixed costs are RM2,500,000 and its debt repayment required are RM1,000,000. Selling price per barrel of oil; is RM18 and variable costs per barrel RM10. (i) Determine the breakeven output (in ringgit). (4 marks) (ii) Determine the number of barrels of oil that offshore must produce and sell in or earn a target (operating) profit of RM1,500,000. (4 marks) (ili) Determine the degree of operating leverage at an output of 400,000 barrels. (4 marks) (iv) Assuming that sales of oil are normally distributed with a mean of 362,500 barrels and standard deviation of 100,000 barrels, determine the probability that offshore will incur an operating loss