Harry's Hookahs incurs $700,000 per year in explicit costs and $500,000 in implicit costs.The company earns $1.4 million in revenues and has $3.7 million in net worth.Based on this information,what is the accounting profit for Harry's Hookahs?

Question

Quizplus · Accepted Answer

Accounting profit is calculated by subtracting explicit costs from total revenues. In this case, $1.4 million - $700,000 = $700,000. Implicit costs are not considered in the calculation of accounting profit.

Harry's Hookahs Incurs $700,000 Per Year in Explicit Costs and $500,000