A Business Owner Makes 50 Items by Hand in Six

question 143

Multiple Choice

A business owner makes 50 items by hand in six hours. She could have earned $10 an hour working for someone else. If each item sells for $5 and the explicit costs total $14, accounting profit for 50 items is:

• A) $74.
• B) $176.
• C) $236.
• D) $300.

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Definitions:

Coupon Rate

The interest rate that an issuer of a bond agrees to pay to the holder of the bond, expressed as a percentage of the bond's face value.

Cost of Debt

the effective rate that a company pays on its current debt.