Ben and Barton are the owner-operators of a bar where they themselves provide all the labor. The
Question:
Ben and Barton are the owner-operators of a bar where they themselves provide all the labor. The costs for the past year were as follows:
Rent and Taxes $ 210,000
Liquor and Food $600,000
Other Expenses $50,000
Suppose Ben and Barton purchased the bar ten years ago for $200,000, but would only get $150,000 if they sold it today; that the market rate of interest is 4%; that Ben could earn $60,000 per year tending bar for someone else, and that Barton could earn $42,000 per year as a waiter. Assume all costs will remain the same for the coming year, but that the owners would only be able to sell the bar for $147,000 at the end of the year because of additional wear and tear. What will be Ben and Barton’s total economic cost of operating the bar this year?
International Marketing And Export Management
ISBN: 9781292016924
8th Edition
Authors: Gerald Albaum , Alexander Josiassen , Edwin Duerr