Walter used to work as a high school teacher for $40,000 per year but quit in order to start his own painting business. to invest in his painting business, he withdrew $20,000 from his savings, which paid 3 percent interest, and borrowed $30,000 from his uncle, whom he pays 3 percent interest per year. last year walter paid $25,000 for supplies and had revenue of $60,000. walter asked tyler the accountant and greg the economist to calculate his painting business’s costs.

The answer is as  follows:

Explanation:

Walter paid for supplies = $25,000 ⇒ This is a component of accounting cost

He also pays 3% interest to his uncle on the loan of $30000 =

= $900

So, the total accounting cost according to Tyler the accountant:

= 25000 + 900

= $25900

Now, as per Greg the economist:

Explicit Cost = $25900

Implicit cost : If walter would not be a painting business then he would have been working as a high school teacher for $40000 per year and interest on savings account that is $600.

∴ Economic cost according to Greg = Explicit cost + Implicit Cost

= 25900 + 40000 + 600

= 66500

answer; complain or request hazard correction from your employer;

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