Until recently you worked as an accountant earning $30,000 annually.Then you inherited a piece of commercial real estate bringing in $12,000 rent annually.You decided to leave your job and operate a video rental store in the office space you inherited. At the end of the first year,your books showed total revenues of $60,000 and total costs of $30,000 for video purchases,utilities,taxes,and supplies.What is the total cost of operating the video store?

Question

Quizplus · Accepted Answer

The total cost includes the explicit costs of $30,000 and the opportunity costs of $42,000 ($30,000 from the foregone salary and $12,000 from the foregone rent), totaling $72,000.

Until Recently You Worked as an Accountant Earning $30,000 Annually