Your company's Office of Institutional Research has come up with the following figures for the year just ended: Utilities Expense $80,000 Rental Expense on Warehouse $100,000 Accounting Depreciation $15,000 Forgone Salary Owner Could Have Made Working at Firm R $75,000 Wages Paid to Workers $95,000 Interest Expense on Bank Loan $10,000 Materials Costs $50,000 Economic Depreciation $25,000 Forgone Salary Owner Could Have Made Working at Firm Y $55,000 Normal Profit $40,000 The owner of the company invested $500,000 of his own money when he started the business. Total Revenues for the year just ended amounted to $430,000. The current interest rate is 3 percent. 

a) The owner of the company wishes to know his accounting profit. 

b) The owner of the company wishes to know his economic profit

Answer rating: 100% (QA)

To calculate the accounting profit and economic profit for the owner of the company we need to consi... View the full answer