Question

Bob used to earn $40,000 per year in his job as a nurse but he quit to open his own pizza shop. Bob used $10,000

from his own savings account and borrowed $200,000 more from his bank. The Interest rate is 4%. In Bob’s first year of business he earned $80,000 in revenue and the cost of ingredients was $67,000. For his first year of business Bob’s economic profit was?

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