Determine accounting profit and economic profit


A person starts her own business. She quits her $40,000 a year job, rents an office for $15,000 a year, pays wages and salaries of $50,000 a year, utilities of $4,000 a year, and materials of $20,000. She uses her own car for sales work rather than leasing an equivalent car for $6000 a year. If revenues are $140,000, her accounting profit and economic profit are respectively (Show all work)

A) $45,000 and $11,000.

B) $45,000 and $5000.

C) $51,000 and $5000.

D) $51,000 and $45,000.

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Macroeconomics: Determine accounting profit and economic profit
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