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The Table Below Provides the Annual Revenues and Costs for a Family-

Question 60

Multiple Choice

The table below provides the annual revenues and costs for a family- owned firm producing catered meals.  Total Revenues ($) 500,000 Total Costs ($)   wages and salaries 200,000 risk- free return of 6% on owners’ capital of 250,00015,000 rent 105,000 - depreciation of capital equipment 25,000 risk premium of 8% on owners’ capital of 250,00020,000 - intermediate inputs 150,000 forgone wages of owners in alternative employment 80,000 interest on bank loan 10,000\begin{array}{|l|l|}\hline \text { Total Revenues }(\$) & 500,000 \\\hline & \\\hline \text { Total Costs (\$) } & \\\hline \text { wages and salaries } & 200,000 \\\hline \text { risk- free return of } 6 \% \text { on owners' capital of } 250,000 & 15,000 \\\hline \text { rent } & 105,000 \\\hline \text { - depreciation of capital equipment } & 25,000 \\\hline \text { risk premium of } 8 \% \text { on owners' capital of } 250,000 & 20,000 \\\hline \text { - intermediate inputs } & 150,000 \\\hline \text { forgone wages of owners in alternative employment } & 80,000 \\\hline \text { interest on bank loan } & 10,000 \\\hline\end{array}
 TABLE 7- 1\text { TABLE 7- } 1
-Refer to Table 7- 1. The economic profits for this family- owned firm are


A) $0
B) $115 000
C) $10 000
D) - $105 000
E) - $10 000

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