Managerial Economics

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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?

  • Managerial Economics -

    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%

  • Managerial Economics -

    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 :

    http://planmagic.com/business_plan/bar_business_plan.html

    Here's an interesting article, but don't miss the "menu" to the left with lots of choices:

    http://www.nightclubpros.com/18andovernightclubs.html

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