Asked by
Charity Dixon
on Oct 08, 2024
Verified
The following is cost information for the Creamy Crisp Donut Company: Entrepreneur's potential earnings as a salaried worker = $50,000
Annual lease on building = $22,000
Annual revenue from operations = $380,000
Payments to workers = $120,000
Utilities (electricity,water,disposal) costs = $8,000
Value of entrepreneur's talent in the next best entrepreneurial activity = $80,000
Entrepreneur's forgone interest on personal funds used to finance the business = $6,000
Refer to the data.Creamy Crisp's economic profit is:
A) $150,000.
B) $80,000.
C) $230,000.
D) $94,000.
Economic Profit
The difference between the revenue received from the sale of an output and the opportunity cost of the inputs used, often considered in terms of exceeding the company's normal profit level.
Entrepreneur's Talent
The unique set of skills, insights, and abilities that an entrepreneur possesses, contributing to their success in creating and running businesses.
Annual Revenue
The total amount of money earned by a business over a year from its sales or services.
- Perform calculations to contrast between accounting profit and economic profit.
- Define economic cost and its significance in decision making.
Verified Answer
CD
Learning Objectives
- Perform calculations to contrast between accounting profit and economic profit.
- Define economic cost and its significance in decision making.