Ellie has been working for an engineering firm and earning an annual salary of $
ID: 1213088 • Letter: E
Question
Ellie has been working for an engineering firm and earning an annual salary of $80,000. She decides to open her own engineering business. Her annual expenses will include $15,000 for office rent, $3,000 for equipment rental, $1,000 for supplies, $1,200 for utilities, and a $35,000 salary for a secretary/bookkeeper. Ellie will cover her start-up expenses by cashing in a $20,000 certificate of deposit on which she was earning annual interest of $500. Refer to Scenario 13-9. Ellie's annual economic costs will equal?
A. $75,200. B. $55,200. C. $80,500. D. $135,700.Explanation / Answer
economic costs=80000+15000+3000+1000+1200+35000+500=135700
salary forgone will also be take into account as that is also cost when estimate economic cost.......................................
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