Suppose That You Open Your Own Business and Earn an Accounting

question 89

Multiple Choice

Suppose that you open your own business and earn an accounting profit of $30,000 per year. When you started your business, you left a job that paid you a $25,000 salary annually. Also, suppose that you invested $70,000 of your own funds to start up your business. If the normal rate of return on capital is 5 percent, your economic profit is

• A) $5,000.
• B) -$1,500.
• C) $1,500.
• D) -$5,000.

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Definitions:

Infiltration

The process by which a substance, like a fluid, permeates or passes into a tissue, often used in the context of liquids entering tissues during medical procedures.

Hypertonic Solutions

Solutions with a higher concentration of solutes compared to the cell's internal environment, leading to osmotic pressure that may cause cell shrinkage.

Umbilical Catheter

A thin tube inserted into one of the blood vessels in the umbilicus (navel) of a newborn for administering medication, fluids, or for drawing blood.

Blanching

A temporary whitening of the skin typically in response to pressure, indicating possible circulatory changes or damage.