2. September 2019/2020 Tim decided to quit from his job as an event manager where he earned RM130,000 a year. Tim sets up a telecommunication business, using his RM600,000 personal savings that earned interest of RM6,000 per year. During that year, he made RM240,000 in total revenue and paid RM13,000 for the costs of equipment, utilities, internet service and office supplies. (i) Calculate Tim’s accounting profit and economic profit. (ii) “I am not sure if I made the right decision to start this business.” says Tim. Comment on the above statement.
2. September 2019/2020 Tim decided to quit from his job as an event manager where he earned RM130,000 a year. Tim sets up a telecommunication business, using his RM600,000 personal savings that earned interest of RM6,000 per year. During that year, he made RM240,000 in total revenue and paid RM13,000 for the costs of equipment, utilities, internet service and office supplies. (i) Calculate Tim’s accounting profit and economic profit. (ii) “I am not sure if I made the right decision to start this business.” says Tim. Comment on the above statement.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
Related questions
Question
2. September 2019/2020
Tim decided to quit from his job as an event manager where he earned RM130,000 a year. Tim sets up a telecommunication business, using his RM600,000 personal savings that earned interest of RM6,000 per year. During that year, he made RM240,000 in total revenue and paid RM13,000 for the costs of equipment, utilities, internet service and office supplies.
(i) Calculate Tim’s accounting profit and economic profit.
(ii) “I am not sure if I made the right decision to start this business.” says Tim.
Comment on the above statement.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, economics and related others by exploring similar questions and additional content below.Recommended textbooks for you
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON
Principles of Economics (MindTap Course List)
Economics
ISBN:
9781305585126
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Managerial Economics: A Problem Solving Approach
Economics
ISBN:
9781337106665
Author:
Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:
Cengage Learning
Managerial Economics & Business Strategy (Mcgraw-…
Economics
ISBN:
9781259290619
Author:
Michael Baye, Jeff Prince
Publisher:
McGraw-Hill Education