Below are some financial data for the Do Drop In convenience store.
The owners have put $40,000 into the business and they worked a total of 80 hours during the week.Savings accounts are currently paying 5.2% interest and the going wage rate is $8 per hour.
-Refer to the information above to answer this question.According to an accountant,what is the week's profit for the Do Drop In?

Question

Below are some financial data for the Do Drop In convenience store.
  The owners have put $40,000 into the business and they worked a total of 80 hours during the week.Savings accounts are currently paying 5.2% interest and the going wage rate is $8 per hour.
-Refer to the information above to answer this question.According to an accountant,what is the week's profit for the Do Drop In?

Quizplus · Accepted Answer

First, we need to calculate the wage expense for the owners, which is:

Wage expense = (number of hours worked by owners) x (wage rate) 
Wage expense = 80 x $8 = $640

Next, we need to calculate the interest earned on the savings account, which is:

Interest earned = (savings balance) x (interest rate) x (time) 
Interest earned = ($40,000) x (0.052) x (1/52) = $40

Finally, we can calculate the profit for the week:

Profit = (revenue) - (expenses) 
Revenue is not given, but we know that it must be greater than $640. Therefore, the minimum profit would be:

Profit = $40 - $640 = -$600

However, the question asks for an accountant's calculation, which suggests that we should include other expenses (such as cost of goods sold, rent, utilities, etc.). Since these expenses are not given, we cannot calculate the exact profit. However, we can eliminate options A, B, D, and E because they are all positive, and we know that the minimum profit is negative. This leaves us with option C as the only possible answer.

Below Are Some Financial Data for the Do Drop in Convenience