Maintaining the building of explicit cost, Macroeconomics

Assignment Help:

An owner can lease her building for $100,000 per year for the next three years. The explicit cost of maintaining the building is $35,000, and the implicit cost is $50,000. All revenues are received, and costs are borne, at the end of each year. Assume interest rate is 4%.

A. Explain what the implicit cost refers to in this case?

B. What is her accounting profit at the end of the first year?

C. What is her economic profit at the end of the first year?

D. What is the present value of the account profits in three years?

E. What is the present value of the economic profits in three years?


Related Discussions:- Maintaining the building of explicit cost

Montary policy, Examine the efficiency of quanttitative credit control inst...

Examine the efficiency of quanttitative credit control instrument

Particular public policy, Select a particular public policy with which you ...

Select a particular public policy with which you are familiar and discuss two positive and two negative aspects of that policy. b. What goal do you think the policy makers were try

Important for policymakers, Why is it important for policymakers to conside...

Why is it important for policymakers to consider both the direct and indirect effects of public policies?

Implication of corruption, what are the implications of corruption in econo...

what are the implications of corruption in economy and fiscal policy

Graph of supply and demand, Draw the supply and demand graph for pizza, the...

Draw the supply and demand graph for pizza, then answer the questions below. SUPPLY OF AND DEMAND FOR PIZZA Quantity Supplied Price Quantity Demanded 300 $15.00 100 240 12.00 180 1

What is money has nothing to do with token itself, What is money has nothin...

What is money has nothing to do with token We also consider that what is money has nothing to do with token or commodity itself: USD is money in United States but not in

Exchange rate, what are the types of exchange rate

what are the types of exchange rate

Positive and normative economics-introduction, Positive and normative econo...

Positive and normative economics -introductiion Economic theory or analysis evolves from basic propositions about how individual human beings (or individual economic units) beh

How firm produce an output, A firm sells its product in a perfectly competi...

A firm sells its product in a perfectly competitive market where other firm charges a price of $90 per unit. The firm's total costs are C(Q) = 50 + 10Q + 2Q2. How much output shoul

Determine the probability and power curve, Learning Objective: Reinforce u...

Learning Objective: Reinforce understanding of Power, β , and α . Problem: A packing process is designed to fill steel drums with 400 pounds of a chemical. To determine whe

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd