A freelance graphic designer earns $100,000 in total annual revenue. They spend $10,000 on software, supplies, and marketing. To start their business, they quit a job that paid an annual salary of $75,000. They also used $10,000 of their personal savings to buy a computer; these savings could have earned a 10% annual return. What are the designer's annual accounting and economic profits?

Business Viability Analysis

Consulting Firm Profit Calculation

A small retail shop owner generates $150,000 in annual revenue. The owner pays $20,000 in rent, $60,000 for inventory, and $30,000 in wages to an employee. The owner could have earned a salary of $50,000 working for another company. Based on this information, the statement 'The shop is earning a positive economic profit' is true.

A software developer starts a new app business. In the first year, the business generates $120,000 in revenue from app sales. The developer spends $15,000 on server hosting and $5,000 on marketing. To start the business, the developer quit a job that paid $90,000 per year and used $40,000 of personal savings, which could have earned a 5% annual return. Based on this scenario, match each economic term with its correct calculated value.

Farmer's Market Profitability Analysis

Entrepreneurial Decision Analysis

Calculating a Missing Implicit Cost

A coffee shop has total revenues of $200,000 and explicit costs of $140,000. The owner's foregone salary is the only implicit cost, valued at $55,000. In this case, the business's economic profit is $____ less than its accounting profit.

Entrepreneurial Decision-Making

Consulting Firm Profit Calculation

A small retail shop owner generates $150,000 in annual revenue. The owner pays $20,000 in rent, $60,000 for inventory, and $30,000 in wages to an employee. The owner could have earned a salary of $50,000 working for another company. Based on this information, the statement 'The shop is earning a positive economic profit' is true.