Y7

Nadia opens a saloon in a shop that she owns at Mall of Africa. She resigns from her job to run the saloon on a full-time basis. She would have earned a salary of R10 000 per month from her previous job as a stylist, as well as a rental income of R5 000 per month had she rented out his shop to a tenant. The monthly production cost and operating expenses of the saloon are R95 000 and R45 000 respectively. Her monthly sales revenue is R150 000. Calculate the economic profit and accounting profit.

a) Economic profit R2 000; accounting profit R8 000

b) Economic profit R5 000; accounting profit R15 000

c) Economic profit -R5 000; accounting profit R10 000

d) Economic profit -R2 000; accounting profit R8 000