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Juan Works as a Landscaper for Local Businesses on Weekends

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Essay

Juan works as a landscaper for local businesses on weekends, and he often provides services in exchange for property. This year Juan provided lawn-mowing services in exchange for $1,275 of car repair services, $3,570 of groceries, and a certificate of deposit (CD)for $4,050. The CD matures next year with interest. Finally, Juan received a gift card that can only be applied for $850 of clothing at a local mall. Juan has only applied the gift card to purchase $100 of clothing. Compute Juan's gross income, assuming that he uses the cash basis of accounting.


Definitions:

Opportunity Cost

The value of the best alternative that is forgone when a decision is made to pursue a particular course of action.

Expected Profit Rate

The forecasted return on an investment, calculated based on potential outcomes and their probabilities.

Net Inventory Investment

The change in the total value of inventories in an economy during a specific period.

Positive

An attribute or condition that reflects an increase, improvement, or favorable outcome.

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