Harvey Quit His Job at State University, Where He Earned

question 326

Multiple Choice

Harvey quit his job at State University, where he earned $58,000 a year. He figures his entrepreneurial talent or forgone entrepreneurial income to be $8,000 a year. To start the business, he cashed in $60,000 in bonds that earned 10 percent interest annually to buy a software company, Extreme Gaming. In the first year, the firm sold 15,000 units of software at $60 for each unit. Of the $60 per unit, $50 goes for the costs of production, packaging, marketing, employee wages and benefits, and rent on a building.The implicit costs of Harvey's firm in the first year were

• A)$150,000.
• B)$72,000.
• C)$78,000.
• D)$900,000.

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Definitions:

Writing

The act or process of forming visible letters or characters specifically for communication or documentation.

Secret Commission

A payment made to an individual for facilitating a transaction without the knowledge of all parties involved.

Entitled

Having a right or claim to something, often by law or through agreements.

Discovered

The act of finding something or someone that was previously unknown or hidden.