Question

Victor is the recipient of $1 million from a lawsuit. Victor decides to use the money to purchase a small business in Florida. His business operates in a perfectly competitive industry. If Victor would have invested the $1 million in a risk-free bond fund, he could have earned $100,000 each year. After he bought the small business, Victor quit his job as a market analyst with Research, Inc., where he used to earn $75,000 per year.

Answer 1

opportunity costs = $175,000

Step-by-step explanation:

Find:

Opportunity cost

Computation:

Opportunity cost = Implicit costs

Opportunity cost = Implicit costs = $100,000 + $75,000

Opportunity cost = $175,000