Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Sarah is a real estate agent who earned $50,000 in 2018. At the beginning of 2019, Sarah wanted to pursue a new career so she

Sarah is a real estate agent who earned $50,000 in 2018.

At the beginning of 2019, Sarah wanted to pursue a new career so she quit her job and opened a yoga studio.

In her first year, she made total revenue of $70,000. Sarah bought equipment for $10,000 using her own money that she had invested at 3% interest. Sarah expected a normal profit of $5,000. Accounting depreciation was $2,000, and overhead costs were $14,000 for the year.

What is Sarah's accounting and economic profit?

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Entrepreneurship Successfully Launching New Ventures

Authors: Bruce R. Barringer, R. Duane Ireland

4th Edition

0132555522, 978-0132555524

More Books

Students also viewed these Economics questions

Question

Go, do not wait until I come

Answered: 1 week ago