Mika withdraws $100,000 from her trust fund to start up her own manicure business. The trust fund earns 4 percent interest. Which of the following statements is true about her business costs?The $4,000 of interest foregone is an implicit cost.When calculating her accounting profit, she should consider the $4,000 in foregone interest as part of her costs.When calculating her economic profit, she should consider the $100,000 from her trust fund and the $4,000 in foregone interest as part of her implicit costs.
A) I only
B) I and III only
C) II and III only
D) I and II only
Correct Answer:
Verified
Q55: If a firm decreases production, its:
A)variable costs
Q56: Mariana needs $20,000 to start up her
Q57: Mika borrows $100,000 to open up her
Q58: Implicit costs are costs that:
A)require a firm
Q59: Explicit costs can include:
A)out-of-pocket costs.
B)fixed costs.
C)variable costs.
D)All
Q61: Suppose Winston's annual salary as an accountant
Q62: Imagine Tom's annual salary as an assistant
Q63: When a company's economic profit is positive,
Q64: Accounting profit is calculated as:
A)total revenue minus
Q65: In general, economic profit is typically:
A)greater than
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