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24 December, 15:05

Your aunt is thinking about opening a hardware store. She estimates that it would cost $300,000 per year to rent the location and buy the stock. In addition, she would have to quit her $45,000 per year job as an accountant. What is the opportunity cost of something

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  1. 24 December, 16:37
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    Opportunity cost = $345,000

    Explanation:

    Given:

    Total investment = $300,000

    Give up job revenue = $45,000

    Opportunity cost = ?

    Computation of opportunity cost:

    Opportunity cost refers to the price we are willing to lose to get something.

    Opportunity cost = Total investment + Give up job revenue

    Opportunity cost = $300,000 + $45,000

    Opportunity cost = $345,000
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