Scenario 14-4 Victor Is the Recipient of $1 Million from a Lawsuit

question 1

Multiple Choice

Scenario 14-4
Victor is the recipient of $1 million from a lawsuit. Victor decides to use the money to purchase a small business in Florida. His business operates in a perfectly competitive industry. If Victor would have invested the $1 million in a risk-free bond fund, he could have earned $100,000 each year. After he bought the small business, Victor quit his job as a market analyst with Research, Inc., where he used to earn $75,000 per year.
-Refer to Scenario 14-4. At the end of the first year of operating his new business, Victor's accountant reported an accounting profit of $150,000. What was Victor's economic profit?

• A)-$150,000
• B)-$50,000
• C)-$25,000
• D)$25,000

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Definitions:

Development

Involves the process of growth and change in humans across the lifespan, including physical, cognitive, and socioemotional changes.

Predictability

The degree to which future events or outcomes can be foreseen based on current or past information.

Continuous Process

Describes an operation or procedure that operates without interruption, typically in a manufacturing or production context.

Sequence Of Stages

A series of steps or phases that occur in a particular order as part of a process or development.