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Changes in Trade Receivables

The economic ...

Question

The economic profit at Nicole's factory is:

A

Rs. 75000

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B

Rs. 35000

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C

Rs. 80000

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D

Rs. 30000

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Solution

The correct option is D Rs. 30000
Economic profit can be defined as the difference between total revenue and total cost.
Total revenue=1000*100 = 100000
Total cost= 20000 for raw materials + 50000 from her savings = 70000
Economic profit = 100000 - 70000
The economic profit at Nicole's factory is Rs. 30000.

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