Scenario: Betty's Cookie Shop
Betty runs a cookie shop where she sells cookies for $1 each.In order to run the business, she employs five people, each of whom worked a total of 500 hours last year; she paid them a wage of
$10 per hour.Her costs of equipment and raw materials add up to $75,000.Her business ability is legendary, and other companies have offered to pay Betty $100,000 if she would come to work for them.She also knows she could sell her cookie shop for $150,000.The bank in town currently pays an annual interest rate of 3% on all funds deposited with it.Assume there is no capital depreciation at this point.
(Scenario: Betty's Cookie Shop) Given the information provided, Betty's explicit costs are equal to:
A.$100,000.
B.$80,000.
C.$250,000.
D.$264,000.

Question

Quizplus · Accepted Answer

The Answer of Scenario: Betty's Cookie Shop
Betty runs a cookie shop where she sells cookies for $1 each.In order to run the business, she employs five people, each of whom worked a total of 500 hours last year; she paid them a wage of
$10 per hour.Her costs of equipment and raw materials add up to $75,000.Her business ability is legendary, and other companies have offered to pay Betty $100,000 if she would come to work for them.She also knows she could sell her cookie shop for $150,000.The bank in town currently pays an annual interest rate of 3% on all funds deposited with it.Assume there is no capital depreciation at this point.
(Scenario: Betty's Cookie Shop) Given the information provided, Betty's explicit costs are equal to:
A.$100,000.
B.$80,000.
C.$250,000.
D.$264,000.