Zhen Left a Job as an Accountant Making $80,000 a Year

question 144

Multiple Choice

Zhen left a job as an accountant making $80,000 a year to open his own business. Zhen now owns his own accounting firm and employs three bookkeepers to help manage his accounts. His total revenue this year was $525,000. Because he is well known for his estate planning and expertise, he is also paid $16,000 per year by a local news station to answer tax questions on their weekly Ask the Accountant segment. His explicit costs for payroll, insurance, taxes, mortgage, and utilities are $390,000. Zhen's economic profit is

• A) $71,000.
• B) $541,000.
• C) $151,000.
• D) $55,000.

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Definitions:

Unfreezing

Involves the process of making an organization or individual ready for change, by breaking down existing norms and behaviors.

Refreezing

The phase in the change process where new behaviors, values, and attitudes are solidified as the new status quo.

Force Field Analysis

A management technique developed by Kurt Lewin, used to identify all the forces for and against a decision or a change, helping to visualize and analyze the situation for better decision-making.

Refreezing

Involves reinforcing, stabilizing, and solidifying the new state after a change has been made, as part of Lewin's three-stage model of change.