ACC - Marina wanted to quit her job as a flight attendant

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Marina wanted to quit her job as a flight attendant where she earned $2,000 each month. She has figured her entrepreneurial talent or foregone entrepreneurial income to be $7,000 a year. To start a new business, she cashed in $100,000 from her saving account that earned 1 percent interest annually. She went on to run a small car dealership called Affordable Rides. In the first year, she sold vehicles and services valued at $540,000. During the year, $500,000 goes to cover all explicit costs (e.g. building, cost of goods sold, marketing, employee wages, interest on a loan, etc.). Calculate, and answer the following (based on the first year):

a) Total Revenue: $
b) Total Explicit Costs: $
c) Accounting Profit: $
d) Total Implicit Costs: $
e) Normal Profit: $
f) Economic Profits: $
g) From an economic perspective, did Marina make a good decision (Yes or No)?

    • 12 years ago
    ACC - Marina wanted to quit her job as a flight attendant
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      acc_case_-_marina_solution.xlsx