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Question

An individual leaves a college​ faculty, where she was earning ​$60,000 a​ year, to begin a new venture.

She invests her savings of ​$45,000​, which were earning 6 percent annually. She then spends ​$20,000 renting office​ equipment, hires two students at ​20,000 a year​ each, rents office space for ​$12,000​, and has other variable expenses of ​$35,000. At the end of the​ year, her revenues are ​$230,000.


1.Her accounting profit is ​$


2.Her economic profit is $

.

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1.Her accounting profit is... View the full answer

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