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E202Exam2.6 - b Is the laundry making an economic profit...

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Chapter 8 7. Bert Jones owns and operates a laundry whose monthly revenue is $9,000. Bert could earn $4,000 a month elsewhere if he did not run the laundry. Monthly expenses are: Labor $1,700 Electricity 100 Rent 3,300 Interest on loan for equipment 900 a. Calculate Bert’s monthly accounting profit.
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Unformatted text preview: b. Is the laundry making an economic profit? Should Bert stay in the laundry business? Explain. c. Suppose Bert had not gotten a loan to buy equipment, but had invested his own money. How would your answers to parts a and b change?...
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