Ask Question
17 March, 15:25

Ariana withdrew $400,000 out of her personal savings account and used it to start her new Internet cafe. The savings account pays 3% interest per year. During the first year of her business, Adriana sold 2,000 cups of coffee for $2.50 per cup and 4,000 hours of Internet time, also at $2.50 per hour. During the first year, the business made monetary outlays of $9,000. You may assume that there is no opportunity cost to Ariana's time. Ariana's accounting profit for the year was

+1
Answers (1)
  1. 17 March, 16:33
    0
    The Ariana's accounting profit for the year was $6,000

    Explanation:

    Accounting Profit : The accounting profit is that profit which records the difference of total revenues and total direct cost.

    Where,

    Total revenues includes sales revenues

    And total cost includes monetary cost, etc.

    So,

    Accounting profit = Total revenues - Total cost

    where

    Total revenues = 2,000 * $2.5 + 4,000 * $2.5 = $15,000

    Monetary cost = $9,000

    So,

    Accounting profit = $15000 - $9000 = $6,000

    Hence, the Ariana's accounting profit for the year was $6,000
Know the Answer?
Not Sure About the Answer?
Find an answer to your question ✅ “Ariana withdrew $400,000 out of her personal savings account and used it to start her new Internet cafe. The savings account pays 3% ...” in 📘 Business if you're in doubt about the correctness of the answers or there's no answer, then try to use the smart search and find answers to the similar questions.
Search for Other Answers