You are working as a Manager at Brown Mountain

Marketing Agency. Your salary is $31.8 per hour and you work 33 hours per week. You have always wanted to be your own boss, but could never afford to start up or purchase your own company. Next week you will gain access to your $100000 trust fund which is currently invested at 13%. Last week you were presented with an opportunity to purchase Hard Brutus Veggie Farm in response to your inquiries. The email stated that the Veggie Farm company is available for $46000. A decision from you is needed by the end of the week.

The 'annual estimates for the first few years including the first of operation supplied by the Hard Brutus

Veggie Farm company are below:

SALES EXPENSES:

RENT

COSTS OF GOODS

OTHER SALARIES

TAXES/FEES

UTILITIES

218000

25000

54500

72000

27000

43000

What are the Implict costs of owning the business?

What are the Explicit costs of owning the business?

What are the total Economic profits?

What are the total Accounting profits?

Should you take the opportunity?

O Yes, because Economic Profits > 0

0

Yes, because Accounting Profits > 0

No, because Economic Profits

No, because Accounting Profits > 0

Transcribed Image Text:

You are working as a Manager at Brown Mountain Marketing Agency. Your salary is $31.8 per hour and you work 33 hours per week. You have always wanted to be your own boss, but could never afford to start up or purchase your own company. Next week you will gain access to your $100000 trust fund which is currently invested at 13%. Last week you were presented with an opportunity to purchase Hard Brutus Veggie Farm in response to your inquiries. The email stated that the Veggie Farm company is available for $46000. A decision from you is needed by the end of the week. The annual estimates for the first few years including the first of operation supplied by the Hard Brutus Veggie Farm company are below: SALES 218000 EXPENSES: RENT 25000 COSTS OF GOODS 54500 OTHER SALARIES 72000 TAXES/FEES 27000 UTILITIES 43000 What are the Implict costs of owning the business? What are the Explicit costs of owning the business? What are the total Economic profits? What are the total Accounting profits? Should you take the opportunity? Yes, because Economic Profits > 0 Yes, because Accounting Profits > 0 No, because Economic Profits < 0 No, because Accounting Profits > 0 27 You are working as a Manager at Brown Mountain Marketing Agency. Your salary is $31.8 per hour and you work 33 hours per week. You have always wanted to be your own boss, but could never afford to start up or purchase your own company. Next week you will gain access to your $100000 trust fund which is currently invested at 13%. Last week you were presented with an opportunity to purchase Hard Brutus Veggie Farm in response to your inquiries. The email stated that the Veggie Farm company is available for $46000. A decision from you is needed by the end of the week. The annual estimates for the first few years including the first of operation supplied by the Hard Brutus Veggie Farm company are below: SALES 218000 EXPENSES: RENT 25000 COSTS OF GOODS 54500 OTHER SALARIES 72000 TAXES/FEES 27000 UTILITIES 43000 What are the Implict costs of owning the business? What are the Explicit costs of owning the business? What are the total Economic profits? What are the total Accounting profits? Should you take the opportunity? Yes, because Economic Profits > 0 Yes, because Accounting Profits > 0 No, because Economic Profits < 0 No, because Accounting Profits > 0 27