Suppose Frank quits his $25,000 a year job and starts his own hauling company. He takes $10,000 out of his savings account at the bank, where he was earning 5 percent interest, to buy a truck. His other expenses, including the truck, are $20,000. Frank's revenues are$48,000. Frank ends up with

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Frank's opportunity cost includes his forgone salary ($25,000) and the interest he would have earned on his savings ($10,000 * 5% = $500), totaling $25,500. His total costs, including the opportunity cost, the initial investment for the truck, and other expenses, are $25,500 + $10,000 + $20,000 = $55,500. With revenues of $48,000, his profit is $48,000 - $55,500 = -$7,500. However, since there's no option matching this calculation directly and considering the provided options, the closest correct interpretation based on the given options is that there might have been a misunderstanding in the calculation process. Given the options and typical approach to such a problem, the correct answer would involve calculating the net profit or loss correctly, considering all expenses and revenues. Without a direct match, we revisit the calculation: Frank's explicit costs are $20,000 (excluding the truck, which is an investment from savings), and his implicit costs are $25,500 (forgone salary + forgone interest). His total revenue is $48,000. The profit (or loss) calculation should consider both explicit and implicit costs against the revenue. However, given the options and the mistake in the initial explanation, there seems to be a misunderstanding in the calculation or interpretation of the options. The correct approach to finding entrepreneurial profit would subtract all costs (explicit and implicit) from the revenue.

Suppose Frank Quits His $25,000 a Year Job and Starts