Vincent Purchased 12 Acres of Land for $150,000

Essay

Vincent purchased 12 acres of land for $150,000. He quit his $40,000-a-year job as a postal employee and opened a stable for boarding horses on his land. The stable generates $50,000 in annual net revenue after all day-to-day expenses have been covered. Assume that the relevant discount rate is 10 percent. What is Vincent's business profit? What is his economic profit?