Solved by verified expert:Instructions and question are below, no questions and no word count but please show work, for the 100 word count no references
discussion_week_one_eco.docx
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Instructions, Please answer questions there is no word count, AND NO REFERENCES But
PLEASE SHOW WORK, HOW YOU ANSWERED THE QUESTION
At the beginning of 2017, a computer programmer quit his job and gave up a salary of $95,000
per year. He started his own organic farm, Turnip Tom’s, Inc. An income statement for Turnip
Tom’s is shown below:
2017
Revenues
$
98,000
Cost of products sold
$
15,500
Selling expenses
$
6,500
Administrative expenses
$
3,200
Total operating costs
$
25,200
Income from Operations
$
72,800
Interest expense (bank loan)
$
9,500
Legal expenses
$
1,200
Income taxes
$
22,000
Net income
$
40,100
Operating costs and expenses
To get started, Tom spent $300,000 of his own savings to purchase land and equipment to be
used for the farm. In 2015, Tom could have earned a 15 percent return by investing in stocks of
other business with risk levels similar to his farm.
Answer the following questions using the information given above. Be sure to show each step of
your calculations.
1. What are the total explicit costs for 2017? Please show work
2. What are the total implicit costs for 2017? Please show work
3. What are the total economic costs for 2017? Please show work
4. What is accounting profit for 2017? Please show work
5. What is economic profit for 2017? Please show work
6. Using only your analysis in question 1-5, would you say that Tom made a good economic
decision to leave is job to start the organic farm? Explain using at least 100 words.(no references
use own words
…
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