A entrepreneur is trying to decide whether to open a health spa. They currently make $35,000 per year as a weight trainer and will quit their job to open the new spa. If they choose to open the spa, it will cost $200000 per year in rent end other operating expenses.
1. What are the accounting costs?
2. What are the opportunity costs?
c. How much would they need to make in revenues to earn positive accounting profits? Positive economic profits?