# Problem #2 Suppose a small business owner has total revenue (sales).pdf

23. Mar 2023
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### Problem #2 Suppose a small business owner has total revenue (sales).pdf

• 1. Problem #2: Suppose a small business owner has total revenue (sales) of \$993,000, and the following partial income statement. a) Compute and report static economic profit (Total Rev. - Exp. Costs Imp. Costs) Static economic profit Suppose "Legal Expenses" were not certain. Rather, they were distributed uniformly with a minimum of \$0 and a maximum of \$90,000. Use the Analysis ToolPak to run a 1,000 observation simulation where you simulate on legal expenses using the above distribution. Use the same seed you used in problem #1. b) Compute and report average economic profit. b) Compute and report average economic profit. Average economic profit c) Compute the percentage of sim. runs that result in a negative economic profit. % of runs with negative economic profit d) Complete the frequency distribution below d) Complete the frequency distribution below