Question

Paula has the following information to evaluatelong dashher current salary of $ 55 comma 000 versus total revenues of $ 120 comma 000 and expenses of $ 79 comma 000 from starting a new business. How much is the opportunity cost associated with starting the new​ business?

Answer 1

$55,000

Step-by-step explanation:

The opportunity costs corresponds to the benefits an investor loses when opting for one alternative over another. In this case, assuming Paula has to quit her job in order to start the new business, the opportunity cost is her current salary since this is the only "benefit" she would miss by starting the new business. Therefore, the opportunity cost is $55,000.