Sam Quits His Job as an Airline Pilot and Opens

question 121

Multiple Choice

Sam quits his job as an airline pilot and opens his own pilot training school. He was earning $40,000 as a pilot. He withdraws $10,000 from his savings where he was earning 6 percent interest and uses the money in his new business. He uses a building he owns as a hanger and could rent it out for $5,000 per year. He rents a computer for $1,200, buys office supplies for $500, rents an airplane for $6,000, pays $1,300 for fuel and maintenance, and hires one worker for $30,000. Sam's total revenue from pilot training classes equaled $90,400. Sam's implicit costs for this year are equal to:

• A) $84,400.
• B) $39,000.
• C) $55,000.
• D) $45,600.
• E) $40,000.

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Hurricane Effects

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Wave-Cut Platform

A gently sloping surface or bench produced by wave erosion.

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The solid rock layer beneath soil, loose rocks, or other surface materials.