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James used $250,000 from his savings account that paid an annual interest of 15% to purchase a hardware store. After one year, James sold the business for $320,000. What is his accounting profit?

Respuesta :

Answer:

There will be accounting profit of $32500

Explanation:

We have given that amount used from saving account = $250000

Interest on the this amount = 15% for one year

So interest in one year [tex]=\frac{250000\times 15\times 1}{100}=37500[/tex]

So total amount used for purchasing hardware = $250000+$37500 = $287500

It is given that he sold the for $320000

We have to find the accounting profit

So profit will be equal to $320000 - $287500 = $32500

So there will be accounting profit will be $32500

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