Choice Malts Breweries has compiled the following information in order to determine its economic profit for the year: Total revenue $300,000 Value of buildings and machinery - At the beginning of the year $300,000 - At the end of the year $280,000 Cost of raw materials $100,000 Wages paid during the year $50,000 Normal profit for the year $40,000 What is the economic profit of Choice Malts Breweries closest to? Select exactly 1 answer(s) from the following: A. $90,000 B. $110,000 C. $130,000 D. $150,000 what do you think? should I sub 'buildings and machinery ’ depreciation?
I’d say A as well. Doesn’t say book value of machinary – put rather sounds like it actually lost economic value. Anyone else?