Economic Utility Function

EconomicUtilityFunction is simply income less cost.

In the real world, you also need to substract taxes. Sale tax and income tax.

So if you buy a candy bar for $1 and sell for $2, utility before taxes is $1. If the sale tax is 8%, you owe $0.08 in sale taxes to the state. You have no way to pay that, except make a check maybe?

Also if the average income tax is 30%, you owe $0.3 to the federal goverment.

Your utility is $0.68, or roughly 68% of your investment.

So the utility function in this hypothetical case:

U(x) = 0.68 * x;

Now we can complicate this model further by adding an initial investment (for example a building treated as cost) and a final sale of the investment, which is of course the sell of your company. After you have recovered the investment, the sell price should be higher than the initial investment, so at least the plan should be to double the investment after a number of years.