Richard Doofus quit his job as an accounting professor to start his own restaurant. He gave up a salary of $50,000 per year and withdrew $100,000 in bank CDs earning 5 percent to buy a building and equipment. In the restaurant's first year it had direct expenses of $75,000 and revenues of $150,000. Calculate the restaurant's economic profit?

Answer rating: 100% (QA)

To calculate the economic profit we need to consider both explicit cost... View the full answer