Robert Bentley owns and operates the Bentley Clothing Store. A traditional income statement is shown below. There is no outstanding mortgage and the building is fully depreciated.If Bentley could rent the building for $88,000 net per year and could work at another business for an annual salary of $130,000, what is the economic Profit/Loss?

After you determine the economic profit /loss, consider the risks inherent in the two alternatives. How do these risks color the decision? How can Robert reduce /mitigate the risks? (460)

Accounting Income Statement Net Sales $650,000 Less Cost of Goods ($250,000) Sold Gross Profit $400,000 Less Operating Expenses: Salary $150,000 Advertising $30,000 Utilities & $20,000 Maintenance Miscellaneous $10,000 Total operating ($210,000) expenses Net Profit (Earnings before interest and tax $190,000 or EBIT)