Question

Zach took $400,000 out of the bank and used it to start his new cookie business. The bank account pays 3 percent interest per year. During the first year of his business, Zach sold 6,000 boxes of cookies for $2.50 per box. Also, during the first year, the cookie business incurred costs that required outlays of money amounting to $9,000.Zach's accounting profit for the year was_________________________________________________________________________________a. $-494,000.b. $-6,000.c. $6,000.d. $12,000.

Answer 1

Answer: C $6,000

Step-by-step explanation:

Accounting profit = Revenue - Explicit Cost

Revenue = 6000 × 2.5 = $15,000

Explicit Cost = $ 9,000

Accounting profit = $15,000 - $ 9,000 = $6,000