Suppose You Have Recently Graduated and Have Been Offered a Salary

question 83

Multiple Choice

Suppose you have recently graduated and have been offered a salary position at a reputable accounting firm of $125,000 (including all benefits) per year. After much consideration, you turn down the offer to start your own accounting firm. You pay yourself $75,000 (including all benefits) a year. Which of the following represents the explicit opportunity cost of your time?

• A)$75,000
• B)$50,000
• C)$100,000
• D)$125,000

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Definitions:

Equipment

Tools, machinery, or apparatus designed for a specific operation or purpose.

Intellectual Property

A category of property that includes intangible creations of the human intellect, such as inventions, literary and artistic works, designs, and symbols.

Intangible Asset

Assets that do not have physical substance but hold value for a business, such as patents, trademarks, and goodwill.

Tangible Asset

Physical and material assets that possess value, such as machinery, buildings, and inventory.