To Earn Money,you Decide to Open Up a Popcorn Stand

question 149

Essay

To earn money,you decide to open up a popcorn stand at your student union.At the end of your first year of operation,your financial condition is as follows: Assume that the opportunity cost of your time is zero.
$\begin{array}{|l|l|}\hline \begin{array}{l}\text { Purchase of popcorn making } \\\text { machine }\end{array} & \$ 5,000 \\\hline \text { Purchase of popping corn } & \$ 1,000 \\\hline \text { Revenue from sale of popcorn } & \$ 5,000 \\\hline\end{array}$ (a)Did you run a deficit or a surplus during your first year?
(b)Assuming a four-year useful life for your popcorn-making machine,how does your answer to (a)change if you evenly depreciate the value of your machine?
(c)How do your answers to (a)and (b)relate to the government's budget balance calculations? Explain.

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Definitions:

Recover

The act of obtaining a return of something or compensation for loss or damage.

Easement by Prior Use

A right that is automatically granted for the continued use of a portion of property because it was visibly and continuously used prior to the division of the property.

Implication

A conclusion that can be drawn from something, although it is not explicitly stated.

Prescription

Legal acquisition of rights through the continuous and habitual exercise of those rights over a lengthy period.