Question: Should the sail maker sail away? Jeny has been working for a large sail-making firm that makes sails for racing and cruising yachts. Somehow she

 Should the sail maker sail away? Jeny has been working for

Should the sail maker sail away? Jeny has been working for a large sail-making firm that makes sails for racing and cruising yachts. Somehow she feels undervalued and has been thinking about leaving her employer and starting her own small sail-making business. She estimates that she can sell $300 000 worth of sails a year. To open this business, Jeny must use the area under a house she owns as the sail loft and the upstairs rooms for storage. Prior to using the house for her business she rented it out for $20 000 per year. She will also hire an assistant sail maker at a salary of $60 000 per year and spend $100 000 each year on materials like cloth and thread used to make sails. Jen's performance was above the average sail maker and presently the sail-making firm pays Jen a handsome $100 000 a year. Calculate Explicit (Direct) cost and Implicit (Indirect) Cost and both the Accounting profit and Economic profit Then based only on economic decision-making, do you predict that she will leave her current employer to start her own new business

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