dcarranza626
dcarranza626
20.04.2021 • 
Business

3. Peter owns a small grain elevator. He hires three helpers at $35,000 per year for each worker, pays annual rent of $7,000 for his shop, and spends $60,000 per year on materials. He
has invested some of his own funds in equipment (augers, bins, etc) that could earn him $3,000
per year if alternatively invested. He has been offered $65,000 per year to work as a manager
for a competitor. He estimates his entrepreneurial talents are worth $5,000 per year. Total
annual revenue from the grain elevator is $235,000. Calculate accounting profit and economic
profit for Peter's elevator. Show your work. Label all associated costs as implicit or explicit.

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