Managerial Economics

employ Problems 1 Rebeckah S. Lamb BUS640: Managerial economicals Michael Thirtle June 4, 2012 Chapter 1: Applied Problem 1 At the beginning of the year, an auditory unity engineer quit his job and gave up a fee of $175,000 per year in order to cash in ones chips his hold business, vigorous Devices, Inc. The new company builds, installs, and maintains custom audio equipment for businesses that have a bun in the oven high-quality audio systems. A partial income statement for Sound Devices, Inc., was shown. To son of a bitch started, the possessor of Sound Devices spent $100,000 of his personal savings to pass on for some of the capital equipment used in the business. In 2010, the owner of Sound Devices could have earned a 15 share return by investing in stocks of early(a) new businesses with riskiness levels similar to the risk level at Sou nd Devices. a. What are the entirety overt, total implicit, and total stinting costs in 2010? The total explicit costs are the cost of products and operate sold ($355,000). b. What is accounting net income in 2010? The accounting advantage is the total revenue ($970,000) minus explicit costs ($355,000). hence; Total Revenue - Explicit be = Accounting clear $970,000- $355,000= $615,000 c. What is economic profit in 2010? The economic profit is the total revenue ($970,000) minus the total economic cost, which in this sample includes total operating costs ($555,000), Interest get subject ($45,000), Legal Expenses ($28,000) and Income Taxes ($165,000) for a total economic cost of $793,000. thus; Total Revenue - Total frugal Cost = Economic Profit $970,000 - $793,000 = ! $177,000 d. Given your answer in part c, rate the owners last to leave his job to start Sound Devices....If you desire to get a full essay, order it on our website: OrderEssay.net

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