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The Table Below Provides the Annual Revenues and Costs for a Family-

Question 112

Multiple Choice

The table below provides the annual revenues and costs for a family- owned firm producing catered meals.  Total Revenues ($) 500000 Total Costs ($)  - wages and salaries 200000 - risk-free return of 6% on owners’ capital of 25000015000 rent 105000 depreciation of capital equipment 25000 risk premium of 8% on owners’ capital of 25000020000 - intermediate inputs 150000 forgone wages of owners in alternative employment 80000 - interest on bank loan 10000\begin{array}{|l|l|}\hline \text { Total Revenues }(\$) & 500000 \\\hline & \\\hline \text { Total Costs }(\$) & \\\hline \text { - wages and salaries } & 200000 \\\hline \text { - risk-free return of } 6 \% \text { on owners' capital of } 250000 & 15000 \\\hline \text { rent } & 105000 \\\hline \text { depreciation of capital equipment } & 25000 \\\hline \text { risk premium of } 8 \% \text { on owners' capital of } 250000 & 20000 \\\hline \text { - intermediate inputs } & 150000 \\\hline \text { forgone wages of owners in alternative employment } & 80000 \\\hline \text { - interest on bank loan } & 10000 \\\hline\end{array} TABLE 7- 1
-Refer to Table 7- 1.The accounting profits for this family- owned firm are


A) - $15 000.
B) $10 000.
C) $30 000.
D) $0.
E) $500 000.

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