Please help with explanation

A paper published in the Harvard Business Review points out a new way to calculate economic profit that could be more appropriate for service firms and other "people-intensive" companies. Instead of focusing on investment and return on investment, the focus is on employee productivity, both in terms of generating revenues and reducing costs. The approach is to first determine economic profit in the conventional way, except that we ignore taxes, so that economic profit is before tax, as follows: Economic profit Operating profit Capital charge Assume the following information for a hotel chain that wishes to adopt the new method. The firm has $100 million in operating profit, $1 billion in investment, and uses a cost of capital rate of 5%, so the capital charge is $50 million and the economic profit is $50 million. Relevant calculations are contained in Part 1 of the following schedule. Use the following information in the table on the bottom Part 1 Economic Profit (in thousands, except cost of capital rate) $500,000 Revenue Operating costs: 300,000 Personnel costs Other costs 100,000 $100,000 Operating profit $400,000 Operating profit before personnel costs (OPBP) $1,000,000 Investment (capital) Cost of capital, rate 0.05 Capital charge $50,000 $50,000 Economic profit Operating profit Capital charge Part 2: Economic Profit Calculated Using Employee Productivity 10,000 Number of employees Employee productivity: Operating profit before personnel cost per employee ($400,000/10,000) $40 Capital charge per employee ($50,000/10,000) $35 Employee productivity Less personnel cost per employee 30 $5 Economic profit per employee F Productivity Cost $50,000 Total economic profit, all employees Note: All numbers in thousands except for number of employees