Asked by Abdullah Ghzzai Ghazi Albeladi on Jul 05, 2024
Verified
Refer to Scenario 14-3. What is Victor's opportunity costs of operating his new business?
A) $25,000
B) $75,000
C) $100,000
D) $175,000
Opportunity Costs
The penalty of bypassing the next most advantageous option when a decision is made.
Small Business
A privately owned corporation, partnership, or sole proprietorship that has fewer employees and less annual revenue than a medium or large company.
Risk-Free
Refers to an investment that is considered to have no risk of financial loss.
- Implement the principles of opportunity costs and sunk costs in making business choices.
Verified Answer
LH
Lawrencia HoustonJul 06, 2024
Final Answer :
D
Explanation :
Victor's opportunity costs include the $100,000 he could have earned from the risk-free bond fund and the $75,000 salary he gave up by quitting his job, totaling $175,000.
Learning Objectives
- Implement the principles of opportunity costs and sunk costs in making business choices.