1500 words MINIMUM (not including cover/reference pages or questions) Requirement is at least five scholarly articles, ONE

1500 words MINIMUM (not including cover/reference pages or questions)

Requirement is at least five scholarly articles, ONE maybe the course textbook BELOW

Textbook(s)

Thomas, C. R., & Maurice, S. C. (2020). Managerial economics: Foundations of business analysis and strategy (13th ed.). McGraw-Hill/Irwin.

UNIT 1 Complete

1. At the beginning of the year, a software developer quit his job and gave up a salary of $90,000 per year in order to start Turnip Tom’s organic farm. A partial income statement for the first year of operation for Turnip Tom’s, Inc., is shown below:

Revenues $ 98,000

Operating costs and expenses

Cost of products sold $ 15,500

Selling expenses $ 6,500

Administrative expenses $ 3,200

Total operating costs $ 25,200

Income from Operations $ 72,800

Interest expense (bank loan) $ 9,500

Legal expenses $ 1,200

Income taxes $ 22,000

Net income $ 40,100

To get started, Tom spent $125,000 of his own savings to purchase land and equipment to be used for the farm. During this year, Tom could have earned a 7 percent return by investing in stocks of other business with risk levels similar to his farm.

(a) What are the total explicit, total implicit, and total economic costs for the year?

(b) What is accounting profit?

(c) What is economic profit?

(d) Using only the data given, would you say that the owner made a good economic decision to leave is job to start the organic farm? Explain.

Share This Post

Email
WhatsApp
Facebook
Twitter
LinkedIn
Pinterest
Reddit

Order a Similar Paper and get 15% Discount on your First Order

Related Questions

Choose one modern-day leader who is respected for their behavior and acknowledged as ethical. Choose another modern-day leader with ethically challenging

Choose one modern-day leader who is respected for their behavior and acknowledged as ethical. Choose another modern-day leader with ethically challenging behaviors. Compare how the two leaders may have perceived their situations differently and what they thought would happen because of their behaviors. What values, beliefs, and experiences drove them

Exam Content 1. Top of Form As a program manager, you must establish practices that’ll best serve the projects you don’t directly oversee and strategize ways

Exam Content 1. Top of Form As a program manager, you must establish practices that’ll best serve the projects you don’t directly oversee and strategize ways to streamline organizational processes. You will use skills like project coordination to help you organize stakeholders and project team members, affirm their roles and responsibilities,