Question
Robert Brown runs a small printing shop. He hires two helpers at $80,000 per year, Pays annual rent of $50,000 for his shop, and spends
Robert Brown runs a small printing shop. He hires two helpers at $80,000 per year, Pays annual rent of $50,000 for his shop, and spends $100,000 per year on materials. He has $600,000 of his own funds invested in equipment (Copying machine, computers, printing supply, and so forth) that could earn him $30,000 per year if alternatively invested. He has been offered $85,000 per year to work as a Graphic designer for a marketing firm. He estimates his entrepreneurial talents worth $25,000 per year. Total annual revenue from printing sales is $570,000.
Calculate the accounting profit and economic profit for Robert Brown's printing shop.
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