ECON 5705 ch 8 - a.AccountingProfits Revenues...

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
a. Accounting Profits Revenues $5,000,000  Less: variable operating costs $4,500,000  less depreciation $40,000  less wages 50,000 Operating income 410,000 interest expense 400,000 accounting income before taxes 10,000 b. Economic Profits Revenues $5,000,000  Less var operating costs 4,500,000 opp value of potential income 30,000 economic depreciation 60,000 economic profit before costs 410,000 Less int expense 400,000 opp cost of equity investment 100,000 profit -90,000
Background image of page 1
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 01/30/2011 for the course ECO 5705 taught by Professor Kest during the Spring '10 term at Hodges University.

Ask a homework question - tutors are online