David has the following information to evaluate-his current salary of $62,000 versus total revenues of $110,000 and expenses of $67,000 from starting a new business.How much is the opportunity cost associated with staying at his current job?

Question

Quizplus · Accepted Answer

The opportunity cost in this scenario is the potential income earned by starting the new business instead of staying at the current job. Therefore, the opportunity cost is calculated as the difference between the income from the new business and the current salary.

Opportunity cost = Income from new business - Current salary

= $110,000 - $62,000

= $48,000

Therefore, staying at the current job has an opportunity cost of $48,000, which is option B.

David Has the Following Information to Evaluate-His Current Salary of $62,000