Revenues

Revenue from sales of goods and services .......................... $100,000,000

Operating costs and expenses:

Cost of products and services sold....................................... $30,000,000

Selling expenses................................................................... $3,000,000

Administrative expense........................................................ $4,000,000

Total operating costs and expenses............................... $37,000,000

Income from operations.............................................................. $63,000,000

Interest expense (corporate bonds & loans) ............................... $500,000

Non-recurring expense (Legal expenses/fines in

settling a federal antitrust suit.............................................. $100,000

Income taxes............................................................................... $740,000

Net income ................................................................................. $61,660,000

During this year of operation, Bonus Realty owned and occupied an office building in downtown

Cleveland. For this year, the building could have been leased to other businesses for $3,000,000 in lease

income. Bonus Realty also owned undeveloped land valued at $10,000,000. Owners of Bonus Realty

can earn a 4% rate of return annually on funds invested elsewhere.

a. Total explicit costs of using market-supplied resources for Bonus Realty for this year are....

b. Total implicit costs of using owner-supplied resources for Bonus Realty for this year are....

c. Total economic cost is....

d. Bonus Realty's accounting profit is....

e. Economic profit for Bonus Realty is....

Revenues Revenue from sales of goods and services .. $100,000,000 Operating costs and expenses: Cost of products and services sold. $30,000,000 Selling expenses..... $3,000,000 Administrative expense... $4,000,000 Total operating costs and expenses ..... $37.000,000 Income from operations... $63,000,000 Interest expense (corporate bonds & loans) .... $500,000 Non-recurring expense (Legal expenses/fines in settling a federal antitrust suit ..... $100,000 Income taxes..... $740.000 Net income ........ $61,660,000 During this year of operation, Bonus Realty owned and occupied an office building in downtown Cleveland. For this year, the building could have been leased to other businesses for $3,000,000 in lease income. Bonus Realty also owned undeveloped land valued at $10,000,000. Owners of Bonus Realty can earn a 4% rate of return annually on funds invested elsewhere. a. Total explicit costs of using market-supplied resources for Bonus Realty for this year are.... 1/3 b. Total implicit costs of using owner-supplied resources for Bonus Realty for this year are.... c. Total economic cost is.... d. Bonus Realty's accounting profit is.... e. Economic profit for Bonus Realty is