After working for 25 years as personal fitness trainers while raising their kids, three sisters cashed...

 

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After working for 25 years as personal fitness trainers while raising their kids, three sisters cashed in a total of $100,000 in bonds and decided to open a small, neighborhood fitness center. They spent the $100,000 on exercise equipment, advertising, computer equipment, and other furnishings for the business. For the next 3 years, they took in $130,000 in revenue each year, paid themselves $35,000 annually each, and rented a space in a strip mall for $34,000 per year. Before the investment, their $100,000 in bonds were earning interest at a rate of 15 percent. Are they now earning economic profits? Explain your answer. O A. They are earning profits of $96,000, which takes into account the opportunity cost of their capital. O B. They are earning profits of $-4,000, which takes into account the $100,000 opportunity cost of their capital. O C. They are earning profits of $-24,000, which takes into account the $15,000 opportunity cost of their capital and the $105,000 combined opportunity cost of their own labor. D. They are earning profits of $81,000, which takes into account the $15,000 opportunity cost of their capital. After working for 25 years as personal fitness trainers while raising their kids, three sisters cashed in a total of $100,000 in bonds and decided to open a small, neighborhood fitness center. They spent the $100,000 on exercise equipment, advertising, computer equipment, and other furnishings for the business. For the next 3 years, they took in $130,000 in revenue each year, paid themselves $35,000 annually each, and rented a space in a strip mall for $34,000 per year. Before the investment, their $100,000 in bonds were earning interest at a rate of 15 percent. Are they now earning economic profits? Explain your answer. O A. They are earning profits of $96,000, which takes into account the opportunity cost of their capital. O B. They are earning profits of $-4,000, which takes into account the $100,000 opportunity cost of their capital. O C. They are earning profits of $-24,000, which takes into account the $15,000 opportunity cost of their capital and the $105,000 combined opportunity cost of their own labor. D. They are earning profits of $81,000, which takes into account the $15,000 opportunity cost of their capital.

Answer rating: 100% (QA)

Correct option is C cottect option is c Explanatio... View the full answer