Accounting profit and economic profit

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Reference no: EM131169622

John passes up an offer for a job paying $50,000 a year and, instead, starts his own business. His new business brings in $160,000 in sales during the first year, and his total costs for items such as materials, labor, equipment, shipping, and insurance come to $65,000. John's “accounting” profit and economic profit during the first year are, respectively:

a. $50,000, and $45,000.

b. $110,000, and $95,000.

c. $95,000, and $50,000.

d. $95,000, and $45,000.

e. None of the above is correct

Reference no: EM131169622

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