You as a businessperson have one million dollars to invest. One option is to invest your money in a saving account that gives you 8% annual interest rate. But you decide to open a book store instead. You need to rent a place for $7900 per month and hire two workers and pay them each $6000 monthly. The other expenses such as purchases and overhead are $6500 per month. Your store generates $395,000 sales per year. How much is your economic profit? Which business do you choose? explain

ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
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You as a businessperson have one million dollars to invest. One option is to invest your money.
in a saving account that gives you 8% annual interest rate. But you decide to open a book store instead.
You need to rent a place for $7900 per month and hire two workers and pay them each $6000 monthly.
The other expenses such as purchases and overhead are $6500 per month. Your store generates
$395,000 sales per year. How much is your economic profit? Which business do you choose? explain
Transcribed Image Text:You as a businessperson have one million dollars to invest. One option is to invest your money. in a saving account that gives you 8% annual interest rate. But you decide to open a book store instead. You need to rent a place for $7900 per month and hire two workers and pay them each $6000 monthly. The other expenses such as purchases and overhead are $6500 per month. Your store generates $395,000 sales per year. How much is your economic profit? Which business do you choose? explain
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