Blank+Class+Test+Week+9 - C lass Test Week 9 This test...

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This test covers Materials from Week 1-8 inclusive. This assignment is worth 15% of the final marks for the course. Question 1 What is the importance of the distinction between implicit and explicit costs to the calculation of economic and accounting profit? Explain this clearly. Koby operates his own business - a surfing school - at a local beach where he teaches tourists how to ride surfboards. If he were not running this business he would be employed by the local council as a beach inspector and paid $_ per year. His annual revenue from the surf school is $_ per annum. His costs are advertising $_ p.a. and an annual licence fee of $_ he pays to the Council for the use of the beach. In addition he pays insurance of $_ per annum against injuries to his clients. He provides surfboards which costs him $_ . He paid for these buy using his savings of $_ which he had in the bank where it received interest of _ % p.a. the remaining $_ he borrowed from a credit union at an interest rate of _ % per annum. At the end the of the first year of business, his surfboards are valued
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This note was uploaded on 08/06/2011 for the course FIN 3616 taught by Professor Henry during the Three '11 term at University of New South Wales.

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Blank+Class+Test+Week+9 - C lass Test Week 9 This test...

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