Poornima is working for a marketing firm making $50,000 per year but considers starting her own marketing company. Poornima has determined that to launch the business, she needs to invest $80,000 of her own funds. The annual cost of running the business will include $60,000 for the rent of the office space, $200,000 for employee wages, and $7,000 for materials and utilities. Poornima plans to manage the business, which means that she will have to quit her current job. Suppose that the interest rate (or rate of return) on investments in the economy is 5%. Poornima's total implicit cost per year is Poornima's total cost per year is

Poornima is working for a marketing firm making $50,000 per year but considers starting her own marketing company. Poornima has determined that to launch the business, she needs to invest $80,000 of her own funds. The annual cost of running the business will include $60,000 for the rent of the office space, $200,000 for employee wages, and $7,000 for materials and utilities. Poornima plans to manage the business, which means that she will have to quit her current job. Suppose that the interest rate (or rate of return) on investments in the economy is 5%. Poornima's total implicit cost per year is Poornima's total cost per year is

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)

14th Edition

ISBN:9781305506381

Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris

Chapter7: Production Economics

Section: Chapter Questions

Problem 11E

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