1. Suppose your company has borrowed $100,000 at 5% interest (the current interest rate) for three years to buy the rights to a trademark for marketing purposes. There are three potential trademarks you are considering, and each will increase your profits over the next three years but in different ways. The table below shows the additional revenue your company would earn in each of the next three years (year 1, year 2 and year 3) for each of the three potential trademarks. Assume you MUST buy one of the three trademarks (you cannot return the money or do something else with it).

	Additional revenue in year 1	Additional revenue in year 2	Additional revenue in year 3
Trademark #1	$30,000	$40,000	$40,000
Trademark #2	$40,000	$40,000	$30,000
Trademark #3	$25,000	$40,000	$50,000

1. What is the present value of the additional revenue for each of the three trademarks?
2. What is the accounting profit from choosing each of the three trademarks?
3. What is the economic profit from choosing each of the three trademarks?
4. Explain (briefly) why only one alternative trademark is relevant in calculating the economic profit of each trademark?
5. Is there any difference between using accounting and economic profit to evaluate whether a particular trademark is a good investment or not?