Question

In estimating projected rate of​ return, an individual who is thinking about leaving a​ $150,000-per-year job to start a new firm requires a higher rate of return than the person thinking of leaving a​ $______-per-year job.

Answer 1

$149,999 or any other amount below $150,000

Step-by-step explanation:

The opportunity cost for an individual that earns $150,000 and wants to quit his/her job is $150,000, so any other individual earning $149,999 or below will have a lower opportunity cost. The opportunity cost adds to the economic costs of a project, so a high opportunity cost reduces the expected return.

*Opportunity cost is defined as the cost of choosing one alternative investment or activity over another.