Question
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For the past 5 years, Sandi has worked as a data analyst earning...
- For the past 5 years, Sandi has worked as a data analyst earning $40,000 during her last year. She quit her job to start a consulting business. She has clients lined up and expects her revenue to be $70,000 in her first year. For her first year, she has rented equipment for $20,000, paid $3,000 for web access and hosting, $4,000 for the cost of phone and cable, and $2,000 for advertising. Sandi's uncle gave her $30,000, which she used to start her business. The current savings interest rate is 3%. Assume her business has been up and running for one year and revenue & costs were as expected. (Show all work )
- Calculate accounting profit. (3 marks)
- Calculate economic profit. (3 marks)
- Calculate normal profit. (1 mark)
- Should Sandi stay in business? Explain. (2 marks)
Answer & Explanation
Solved by verified expertAnswered by DoctorScorpion22831 on coursehero.com
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