Refer to Scenario 9

Multiple Choice

Refer to Scenario 9.2 below to answer the question(s) that follow.
SCENARIO 9.2: Tom borrowed $40,000 from his parents to open a donut stand. He agrees to pay his parents a 5% yearly return on the money they lent him. His other yearly fixed costs equal $10,000. His variable costs equal $25,000. He sold 40,000 dozen donuts during the year at a price of $2.00 per dozen.
-Refer to Scenario 9.2. Tom's profit is

A) $0.
B) $26,000.
C) $30,000.
D) $43,000.