Answer:
Accounting profit= $75,000
Step-by-step explanation:
Giving the following information:
She invests her savings of $20,000. She then spends $20,000 renting office equipment, hires two students at $30,000/student a year, rents office space for $15,000, and has other variable expenses of $50,000. At the end of the year, her revenues are $240,000.
The accounting profit does not take into account the opportunity cost of other investments/earnings.
Total costs= 20,000 + 20,000 + 60,000 + 15,000 + 50,000= $165,000
Revenues= 240,000
Accounting profit= 240,000 - 165,000= $75,000