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Suppose That You Open Your Own Business and Earn an Accounting

question 63

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Suppose that you open your own business and earn an accounting profit of $35,000 per year. When you started your business, you left a job that paid you a $30,000 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 10 percent, your economic profit is


Definitions:

Resources

Assets or materials that can be drawn upon by a person or organization in order to function effectively.

Stakeholders

Individuals or groups that have an interest or stake in the success and activities of a company or project.

Universalization Test

A philosophical concept used in ethics to determine if an action's principle can be applied universally without contradiction.

Universalization Test

A principle in ethics asking whether an action's rationale could be universally applied, contributing to evaluating its moral worth.

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