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Mary worked as a real estate agent for Pied Properties for 15 years. Her annual income is approximately $100,000 per year. Mary is considering...
Mary worked as a real estate agent for Pied Properties for 15 years. Her annual income is approximately $100,000 per year. Mary is considering establishing her own real estate agency. She expects to generate revenues during the first year $2 million. Salaries paid to her employees are expected to total to $1.5 million. Operating expenses (i.e.. rent , supplies, utility service) are expected to total $250,000. To begin the business Mary must borrow $500,000 from her bank at an interest of 15 percent. Equipment will cost Mary $50,000. At the end of one year, the value of the equipment will be $30,000.
a- determine the accounting profit for this venture.
b- determine the economic profit for this venture.
c- what are the amount of this firm explicit cost and implicit cost
