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

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Definitions:

Domain Specific

Relating to knowledge or skills that are limited to a particular area, subject, or field.

Facial Features

The distinct parts of the face such as eyes, nose, mouth, which contribute to individual appearance.

Negative Reinforcement

A learning process in behavioral psychology where the removal or avoidance of an unpleasant stimulus strengthens the behavior that avoids or removes the stimulus.

Cognitive

Related to the process of knowing, including aspects such as awareness, perception, reasoning, and judgment.