question archive You are employed as a Chartered Certified Accountant in an insurance company
You are employed as a Chartered Certified Accountant in an insurance company
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You are employed as a Chartered Certified Accountant in an insurance company. You are completing starting your own business. In considering whether or not to start your own business, your current salary level would be Select one: a. A sunk cost b. An incremental cost c. An opportunity cost d. An irrelevant cost
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Answer is C.) Opportunity Cost.
Opportunity cost is the cost of losing one alternative when another alternative is chosen. Here when we choose to start our own business then our current salary of working as a chartered certified Accountant in an Insurance Company is the opportunity cost of doing our own business, because in order to do business we need to forego the current salary. Hence current salary level is the opportunity cost.
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