To Earn Money,you Decide to Open Up a Popcorn Stand

question 31

Essay

To earn money,you decide to open up a popcorn stand at your student union.At the end of your first year of operation,your financial condition is as follows: Assume that the opportunity cost of your time is zero.
$$\begin{array} { | l | l | } \hline \text { Purchase of popcorn maloing machine } & \mathbf { \$5 , 0 0 0 } \\\hline \text { Purchase of popping corn } & \mathbf { \$1 , 0 0 0 } \\\hline \text { Revenue from sale af popcorn } & \mathbf { \$5 , 0 0 0 } \\\hline\end{array}$$ (a)Did you run a deficit or a surplus during your first year?
(b)Assuming a four-year useful life for your popcorn-making machine,how does your answer to (a)change if you evenly depreciate the value of your machine?
(c)How do your answers to (a)and (b)relate to the government's budget balance calculations? Explain.

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