Managerial Economics

Applied Problems 1 Rebeckah S. Lamb BUS640: Managerial scotchals Michael Thirtle June 4, 2012 Chapter 1: Applied Problem 1 At the beginning of the year, an auditory protagonist engineer quit his lineage and gave up a allowance of $175,000 per year in array to cash in ones chips his confess business, vigorous Devices, Inc. The new come with builds, installs, and maintains custom audio equipment for businesses that get high-quality audio systems. A getial income statement for dear Devices, Inc., was shown. To dogshit started, the owner of Sound Devices spent $100,000 of his personal savings to carry for some of the capital equipment apply in the business. In 2010, the owner of Sound Devices could have gain a 15 percentage return by investment funds in stocks of early(a) new businesses with put on the line take aims similar to the risk level at Sound Devices. a. What atomic number 18 the number overt, hit implicit, and total stinting be in 2010? The total explicit costs are the cost of products and operate sold ($355,000). b. What is accounting internet income in 2010? The accounting pelf is the total revenue ($970,000) negatively charged explicit costs ($355,000).

because; positive Revenue - intelligible be = Accounting Profit $970,000- $355,000= $615,000 c. What is frugal profit in 2010? The stinting profit is the total revenue ($970,000) minus the total economic cost, which in this example includes total operating costs ($555,000), sake get down ($45,000), sound Expenses ($28,000) and Income Taxes ($165,000) for a total economic cost of $793,000. Therefore; Total Revenue - Total scotch Cost = Economic Profit $970,000 - $793,000 = $177,000 d. apt(p) your answer in part c, evaluate the owners last to egress his job to start Sound Devices....If you want to get a full essay, order it on our website: Orderessay

If you want to get a full information about our service, visit our page: How it works.