Marge Opens an Oxygen Bar in a Building She Owns

question 161

Multiple Choice

Marge opens an oxygen bar in a building she owns.She used to rent the building to her brother in law for $10,000 a year.To open the oxygen bar,Marge quit her job as a physician assistant,which paid $80,000 a year.As a bar owner,Marge has to pay $40,000 a year wages for her bartender,spend $25,000 a year for supplies,and the utilities bill is $9,500 a year.To cover the start-up costs,she used up all of her savings which earned $4,600 in interest.Total annual revenue at the end of the year is $450,000.Marge's economic profit is:

• A) $450,000
• B) $375,500
• C) $74,500
• D) $280,900
• E) $410,000

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Definitions:

Angel Investors

Wealthy individuals who provide capital for start-ups or entrepreneurs, often in exchange for ownership equity.

Investment Range

The spectrum or variety of investment amounts or categories that an individual or entity is willing to commit to a project or asset.

Venture Capitalists

Investors who provide capital to startups and small businesses with long-term growth potential.

Equity

Represents fairness or justice in the way people are treated and involves ensuring that everyone has access to equal opportunities.