Chapter7_practice

Chapter7_practice - Practice Problems Chapter 7: Costs...

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Practice Problems Chapter 7: Costs MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) Sarah earns $40,000 per year working for a large corporation. She is thinking of quitting this job to work full time in her own business. She will invest her savings of $50,000 (which currently has an annual 10% rate of return) into the business. Her annual opportunity cost of this new business is A) $40,000. B) $0. C) $90,000. D) $45,000. 1) 2) Johnny has worked as a CPA for Fve years and wants to open his own public accounting practice. The cost of his college degree in accounting represents A) the opportunity cost of this endeavor. B) a variable cost. C) an expense. D) a sunk cost. 2) 3) If a Frm buys a building so as to have ofFce space for its workers, the monthly opportunity cost of the building is best measured as A) the monthly mortgage payment the Frm must pay. B) the
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This note was uploaded on 04/10/2012 for the course ECN 100B taught by Professor Jamesbushnell during the Fall '11 term at UC Davis.

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Chapter7_practice - Practice Problems Chapter 7: Costs...

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