Problem 01-10 (algo)An owner can lease her building for $120,000 per year for three years. The explicit cost of maintaining the building is $40,000, and theimplicit cost is $55,000. All revenues are received, and costs borne, at the end of each year. If the interest rate is 8 percent, determinethe present value of the stream of:Instructions: Do not round intermediate calculations. Round your final calculation to two decimal places.a. Accounting profits.$217859.8b. Economic profits.$68081.20

1) Accounting Profit = Revenue-Explicit CostAccounting profit = 120,000-40000Accounting profit =…

Answered: Problem 01-10 (algo) An owner can lease…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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