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Grayson is planning on opening his own landscaping business. he currently earns $40,000 per year working for his uncle but grayson will need to quit that job if he wants to open his own business. he hires one employee at an annual wage of $20,000. grayson plans to use $20,000 in savings to pay for the equipment he needs, and the market value of the equipment at the end of the year is $15,000. the current interest rate on savings is 5 percent. grayson also buys $5,000 of services from other firms. grayson predicts that the revenue from the new landscaping company is $150,000 a year. what is total opportunity cost incurred by grayson in opening his own business?

Respuesta :

The total opportunity cost incurred by Grayson in opening his own business is $40000.

How to calculate the opportunity cost?

The opportunity cost is the forgone alternative when another choice is made.

In this case, the opportunity cost will be the $40,000 per year that he was earning when working for his uncle.

In conclusion, the correct option is $40000.

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