Peggy-Sue’s cookies are the best in the world, or so I hear. She has been offered a job by Cookie Monster, Inc. to come to work at $130,000 per year.

Currently, she is producing her own cookies, and she has revenues of $260,000 per year. Her costs are $40,000 for labor, $15,000 for rent, $35,000 for ingredients, and $5,000 for utilities. She has $100,000 of her own money invested in the operation, which, if she leaves, can be sold for $400,000 that she can invest at 1 percent per year.

a. Calculate her accounting and economic profits.

b. Advise her as to what she should do.