Question: Dane decides to give up a job earning $200,000 per year as a corporate lawyer and converts the duplex that he owns into a UFO

Dane decides to give up a job earning $200,000 per year as a corporate lawyer and converts the duplex that he owns into a UFO museum. (He had been renting out the duplex for $20,000 a year.) His explict costs are $75,000 per year paid to his assistants and $10,000 per year for utilities. Fans flock to the museum to see his collection of extraterrestrial paraphernalia, which he could easily sell on eBay for $1,000,000. Over the course of the year, the museum brings in revenues of $200,000.
a. How much is Dane's accounting profit for the year?
b. Is Dane earning an economic profit? Explain.

Step by Step Solution

★★★★★

3.51 Rating (168 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock

a Accounting profit revenues explicit costs Explicit co... View full answer

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Document Format (1 attachment)

1347-B-A-A-M-E(338).docx

120 KBs Word File

Students Have Also Explored These Related Micro Economics Questions!

With his first paycheck, Steve decides to buy a car. After spending hours researching the many specifications each car hasfrom gas mileage to horsepowerhe decides to give up trying to find the...

Sydney is interested in starting a new business, but would have to give up a job with a total compensation of $100,000 per year. After researching the new business opportunity, Sydney developed the...

Suppose you are accepted to all of the three business schools to which you applied. Consider all the factors that could matter when it comes to choosing a business school. a. How would you go about...

Dane decides to give up a job earning $200,000 per year as a corporate lawyer and converts the duplex that he owns into a UFO museum. (He had been renting out the duplex for $20,000 a year.) His...

Dane decides to give up a job earning $100,000 per year as a corporate lawyer and converts the duplex that he owns into a UFO museum. (He had been renting out the duplex for $20,000 a year.) His...

Dane decides to give up a job earning $200,000 per year as a corporate lawyer and converts the duplex that he owns into a UFO museum. (He had been renting out the duplex for $20,000 a year.) His...

Dane decides to give up a job earning $100,000 per year as a corporate lawyer and converts the duplex that he owns into a UFO museum. (He had been renting out the duplex for $20,000 a year.) His...

3.7 Dane decides to give up a job earning $200,000 per year as a corporate lawyer and converts the duplex that he owns into a UFO museum. (He had been renting out the duplex for $20,000 a year.) His...

Dane decides to give up a job earning $ 9 0 comma 0 0 0 9 0 , 0 0 0 per year as a corporate lawyer and converts the duplex that he owns into a UFO museum. ( He had been renting out the duplex for $ 1...

Dane decides to give up a job earning $200,000 per year as a corporate lawyer and converts a duplex he owns into a UFO museum. The market rent for a similar duplex is $20,000 a year. He pays wages of...

What are the principal components of M1 and M2 money?

Examine the following Minitab output. Discuss the statistical test, its intent, and itsoutcome. Runs Test Runs above and below K-1.4200 The observed number of runs = 28 The expected number of runs -...

Create a 2 - dimensional array containing the arrays [ 1 3 , 5 ] , [ 1 1 , 1 9 ] , [ 1 6 , 1 7 ] , [ 6 , 1 0 ] , [ 1 4 , 4 ] .

One of the domestic auto manufacturers (which we shall call company D) is considering some strategic changes to its luxury-subcompact model. Its research indicates that consumers con sider two main...

What is dumping? Who benefits and who loses from dumping? What problems arise when anti-dumping laws are implemented?

Journalize the following, assuming a 360-day year is used for interest computations: Apr. 30- Issued a $648,000,90-day, 8% note dated April 30 to Misner Co. on account. July 30 Paid Misner Co. the...

Check my work During the course of your examination of the financial statements of the Hales Corporation for the year ended December 31, 2018, you discover the following: a. An insurance policy...

Please answer B & C! C. Eastwood, A. North, and M. West are manufacturers' representatives in the architecture business. Their capital accounts in the ENW partnership for 201 were as follows:...