Harvey Quit His Job at State University, Where He Earned

question 390

Multiple Choice

Harvey quit his job at State University, where he earned $65,000 a year. He figures his entrepreneurial talent or forgone entrepreneurial income to be $5,000 a year. To start the business, he cashed in $70,000 in bonds that earned 10 percent interest annually to buy a software company, Extreme Gaming. In the first year, the firm sold 20,000 units of software at $50 for each unit. Of the $50 per unit, $45 goes for the costs of production, packaging, marketing, employee wages and benefits, and rent on a building.The accounting profit of Harvey's firm in the first year was

• A)$100,000.
• B)$77,000.
• C)$23,000.
• D)$1,000,000.

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Definitions:

Independently

Acting or functioning without dependence on others; autonomously.

Observing

The act of carefully watching and examining phenomena, environments, or behaviors to gather information.

Onlooker Play

A stage of child play where the child observes others playing but does not join in, often seen as a critical stage in social development.

Observing

The act of carefully watching and noting phenomena as they occur in order to gather information or come to a conclusion.