Imagine Tom's Annual Salary as an Assistant Store Manager Is

question 110

Multiple Choice

Imagine Tom's annual salary as an assistant store manager is $30,000. He also owns a building that he rents out, earning $10,000 annually, and he has financial assets that generate $1,000 per year in interest. One day, after deciding to be his own boss, he quits his job, evicts his tenants, and uses his financial assets to establish a bicycle repair shop in the building he owns. To run the business, he outlays $15,000 in cash to cover all the costs involved with running the business, and earns revenues of $50,000. What is Tom's accounting profit?

• A)$50,000
• B)$24,000
• C)$35,000
• D)−$6,000

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