Mike starts his own business after quitting his job in which he made $75,000. expenses include $100,000 for wages and salaries, which includes a wage for the owner of $75,000, utilities of $5000, equipment of $50,000, and materials of $40,000. if revenues are $200,000, his accounting and economic profits are respectively:

Accounting Profits = $130,000

Economic profit = $5,000

Explanation:

Data provided in the question:

Previous wage = $75,000

Expenses for wages and salaries = $100,000

Wage for the owner = $75,000

Utilities = $5000

Equipment charges = $50,000

Materials = $40,000

Revenues = $200,000

Now,

Since he is himself the owner his salary will not be included in the wages expense

Thus,

Net expense for salary = $100,000 - $75,000

= $25,000

Accounting Profits = Revenues - Net expense for salary - Utilities - Materials

= $200,000 - $25,000 - $5,000 - $40,000

= $130,000

Economic profit = Accounting Profits - Equipment charges - Previous wage

= $130,000 - $50,000 - $75,000

= $5,000

it's actually a very difficult task, due to not many people can make 2 million dollars in 2 years. besides that, to the not-so-realistic ideas, you can create a business. it could be practically anything, but make it into a business that isn't that known yet, you get me? also, lets not forget about stock market. that's where all the good stuff happens. use investments at the beginning and begin to raise up your business or whatever you're going to do. as this is a very non-realistic idea, it's still worth the shot!