Asked by Samantha Shaughnessy on Jul 21, 2024
Verified
Harvey quit his job at State University, where he earned $45,000 a year. He figures his entrepreneurial talent or forgone entrepreneurial income to be $5,000 a year. To start the business, he cashed in $100,000 in bonds that earned 10 percent interest annually to buy a software company, Extreme Gaming. In the first year, the firm sold 11,000 units of software at $75 for each unit. Of the $75 per unit, $55 goes for the costs of production, packaging, marketing, employee wages and benefits, and rent on a building.The total revenues of Harvey's firm in the first year were
A) $220,000.
B) $105,000.
C) $605,000.
D) $825,000.
Total Revenues
The complete amount of income generated by a business from its sales or services before any expenses are subtracted.
Entrepreneurial Talent
The unique skills, creativity, and innovative capabilities that entrepreneurs bring to create and manage new ventures, driving economic growth.
Explicit Costs
Direct, out-of-pocket payments for resources employed in the production process.
- Investigate the methods companies use to determine overall expenses and how different costs influence corporate earnings.
Verified Answer
AA
Adiba ArapahJul 24, 2024
Final Answer :
D
Explanation :
Total revenues = 11,000 units * $75 per unit = $825,000.
Learning Objectives
- Investigate the methods companies use to determine overall expenses and how different costs influence corporate earnings.