Homework 4 (Due Monday, Sept. 17th in class)

Part 1: 

Directions: Calculate the accounting and economic profit for the following case study.

The owner of Crested Butte Ski Rentals purchased $150,000 worth of skis for rentals. The revenue from the rentals is $300,000. Utilities are $20,000 per year and wages are $50,000. There is an outstanding loan, and the interest owning per year is $12,000. If the skis had not been purchased, the owner could earn $11,500 in annual interest income on the $150,000 otherwise used to buy the skis. The owner was offered another managerial position at another ski shop for $40,000 a year. 

Part 2: 

Consider all the various cost associated with having a child. Create a list of explicit and implicit cost of having a child over the course of a lifetime.