BA 315: STUDY GUIDE FOR FINAL EXAM
Your final exam is on Wednesday December 8, 2004 at 6 p.m. in MCK 240C.
exam is open book and notes.
The following questions are provided as a guide for your
preparations for final exam.
My office hours for final week are 8:00-10:00 a.m. Monday and Tuesday.
Please stop by
if you need help (no emails please).
Economic Profit, Normal profit
Sweet Stuff, a candy store, had total revenues last year of $500,000.
for payroll, cost of goods sold, rent, and supplies totaled $336,000.
The owner invested
$200,000 in the firm, although she could have invested in bonds paying a 12% return.
What is the firm's economic profit?
none of the above
Kate recently invested $250,000 in a new scooter rental company.
At the end of
the year, the company's income statement reported revenues of $180,000 and costs of
As long as the normal rate of return is less than _____, the company's
economic profit was greater than zero.
Suppose you inherited $100,000 and decided to invest the money in a boutique
(although you could have bought bonds paying a guaranteed 10% annual
At the end of the first year, your accountant reported that your sales
had exceeded your costs by $10,000.
What is your economic profit for the
a profit of $10,000
a profit of $5,000
a loss of $5,000
a loss of $10,000