Suppose After Graduating from College You Get a Job Working

question 29

Multiple Choice

Suppose after graduating from college you get a job working at a bank earning $30,000 per year.After two years of working at the bank earning the same salary,you have an opportunity to enroll in a one-year graduate program that would require you to quit your job at the bank.Which of the following should not be included in a calculation of your opportunity cost?

• A)the cost of tuition and books to attend the graduate program
• B)the $30,000 salary that you could have earned if you retained your job at the bank
• C)the $45,000 salary that you will be able to earn after having completed your graduate program
• D)the value of insurance coverage and other employee benefits you would have received if you retained your job at the bank

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Definitions:

Lessee

The party in a lease agreement who has the right to use the property, plant, or equipment leased from the lessor for a specified period.

Sale and Leaseback

A financial transaction where the owner sells an asset and immediately leases it back from the buyer, often used in real estate.

Financial Lease

A type of lease where the lessee has use of the asset for most of its useful life, and the lease payments are designed to cover the full cost of the asset, often with an option to purchase the asset at the end of the lease term.

Lessor

The party who rents or leases property to another; the owner of the property being rented or leased.