posted by Dawn on .
The Midnight hour a local nightclub earned $100,000 in accounting profit last year. This year the owner, who had invested $1million in the club, decided to close the club. What can you say about economic profit (and the rate of return) in the nightclub business?
a) you could say the nightclub had zero or negitive economic profits.
b) The rate of return on capital in the nightclub business is 10%
Thank you for using the Jiskha Homework Help Forum. Take a look at the nightclubs that make it and the many that don't. It's a big investment in the first place, a liquor license must be obtained, etc. Here is a plan to start up a bar :
Here's an interesting article, but don't miss the "menu" to the left with lots of choices: