Fred Is Considering Opening a Ski Shop in Colorado

Multiple Choice

Fred is considering opening a ski shop in Colorado.Assume Fred will incur the following costs: building rent = $100,000/year,inventory = $250,000/year,energy = $50,000/year,and labor (one clerk) = $10,000/year.In addition,Fred's current income as a computer programmer is $40,000 per year.Assuming Fred would earn $460,000 in revenues,he could expect to earn:

A) an accounting profit of $10,000 per year.
B) an accounting profit of $60,000 per year.
C) an economic profit of $10,000 per year.
D) an economic profit of $50,000 per year.