​Sebastian Decides to Open a Tree Farm

question 81

Multiple Choice

​Sebastian decides to open a tree farm. When deciding to open his own business, he turned down two separate job offers of $25,000 and $30,000 and withdrew $20,000 from his savings. Sebastian's savings account paid 3 percent interest. He also borrowed $20,000 from his brother, whom he pays 2 percent interest per year. He spent $15,000 to purchase supplies and earned $50,000 in revenue during his first year. Which of the following statements is correct?

• A)​Sebastian's economic profit is $4,000, and his accounting profit is $34,600.
• B)​Sebastian's economic profit is $4,600, and his accounting profit is $35,000.
• C)​Sebastian's economic profit is -$16,000, and his accounting profit is $34,600.
• D)​Sebastian's economic profit is -$16,000, and his accounting profit is $14,600.

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Definitions:

Accurate Manner

Refers to performing actions or producing results with high precision and reliability, minimizing errors and discrepancies.

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Teachings or experiences that convey principles of right and wrong behavior, often intended to guide ethical and moral development.

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An expression of approval, commendation, or admiration.