Elena resigns from her job as a software engineer earning £65,000 £65,000\,£65,000 per year to start an ed-tech business. To fund the launch, she withdraws £20,000 £20,000\,£20,000 from a savings account that was earning 5% annual interest. In its first year, the business records total revenue of £240,000£240,000£240,000, cost of sales of £80,000£80,000£80,000, and administrative overheads of £110,000£110,000£110,000.
What are the first-year accounting profit and economic profit for Elena's business?
Accounting profit = £50,000£50,000£50,000; Economic profit = −£16,000-£16,000−£16,000
Accounting profit = £50,000£50,000£50,000; Economic profit = −£15,000-£15,000−£15,000
Accounting profit = −£15,000-£15,000−£15,000; Economic profit = −£16,000-£16,000−£16,000
Accounting profit = £50,000£50,000£50,000; Economic profit = £116,000£116,000£116,000