Merrilyn Forney is considering starting a delivery service company. She presently makes PHP 800,000 a year as a junior advertising executive and will give up this job if she opens the delivery service company. She plans to start with two motorcycles; hence, if she chooses to establish and operate the delivery service company, her annual cost will be: PHP 400,000 for compensation of drivers;PHP 20,000 for motorcycle maintenance; PHP 5,000 for insurance; PHP 24,000 for fuel; and PHP 6,000 for oil.

ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
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[1st_itemA] *problem situation in the photo below*

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  • Differentiate between accounting and economic costs. 
Merrilyn Forney is considering starting a delivery
service company. She presently makes PHP 800,000 a
year as a junior advertising executive and will give up
this job if she opens the delivery service company. She
plans to start with two motorcycles; hence, if she
chooses to establish and operate the delivery service
company, her annual cost will be: PHP 400,000 for
compensation of drivers;PHP 20,000 for motorcycle
maintenance; PHP 5,000 for insurance; PHP 24,000 for
fuel; and PHP 6,000 for oil.
Transcribed Image Text:Merrilyn Forney is considering starting a delivery service company. She presently makes PHP 800,000 a year as a junior advertising executive and will give up this job if she opens the delivery service company. She plans to start with two motorcycles; hence, if she chooses to establish and operate the delivery service company, her annual cost will be: PHP 400,000 for compensation of drivers;PHP 20,000 for motorcycle maintenance; PHP 5,000 for insurance; PHP 24,000 for fuel; and PHP 6,000 for oil.
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