Calculate the accounting and economic profits

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Reference no: EM13246332

Peggy-Sue's cookies are the best in the world, or so I hear. She has been offered a job by Cookie Monster, Inc., to come to work for them at $125,000 per year.

Currently, she is producing her own cookies, and she has revenues of $260,000 per year. Her costs are $40,000 for labor, $10,000 for rent, $35,000 foringredients, and $5,000 for utilities. She has $100,000 of her own money invested in the operation, which, if she leaves, can be sold for $40,000 that she can invest at 10 percent per year.

Calculate her accounting and economic profits. Advise her as to what she should do LO1

Reference no: EM13246332

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