Tomas quit his job at the tri-city bank where he earned


Tomas quit his job at the Tri-City bank where he earned $50,000 a year to start his own businesses, a bank marketing company. He estimates his entrepreneurial talent or forgone entrepreneurial income to be $5,000 a year. He used $100,000 in savings that earned 5 percent interest annually to finance the new business. In the first year, the firm earned revenue of $250,000. The costs for rent, supplies, and an employee’s salary were $200,000. What was the accounting profit for the new business? What was the economic profit (or loss)? Explain your calculations for both questions.

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Business Economics: Tomas quit his job at the tri-city bank where he earned
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