Scenario 9.1 Jane Left Her Job at Siemens and Started Her Own

question 75

Multiple Choice

Scenario 9.1
Jane left her job at Siemens and started her own boutique. She used to earn $50,000 annually at Siemens. She took a loan of $10,000 and used $20,000 from her personal savings to begin her venture. She agreed to repay the loan with 10% interest. Her business is bringing in $80,000 annually. She has rent and labor expenses of $15,000. Also assume that Jane could have used her own money i.e. $20,000 to buy stocks in Intel which would have returned 5% to her last year.
-Nancy owns and operates a drug store that generates total revenues worth $30 million in a particular year. Her accounting costs for the year are $25 million. She could have earned $3 million in this year, if she had worked as a consultant for a pharmaceutical firm. Further, she could have earned 5 percent interest on $40 million of her own money that she invests in the business this year. Nancy's accounting profit in this year is _____ and her economic profit is _____.

• A)$5 million; zero
• B)$5 million; $3 million
• C)$5 million; $8 million
• D)zero; $3 million
• E)$3 million; $43 million

---

Definitions:

Radiation

The emission of energy as electromagnetic waves or as moving subatomic particles, especially high-energy particles which cause ionization.

PET Scans

Positron Emission Tomography scans, a type of imaging test that allows doctors to check for diseases in the body by using a special dye containing radioactive tracers.

fMRI

Functional Magnetic Resonance Imaging, a technique for measuring and mapping brain activity by detecting changes associated with blood flow.