If you invested $100,000 of your own money in the business and typical investments in this economy earn 10%, then the forgone interest of $10,000 must also be thought of as an economic cost. Typically we don't think of the $100,000 initial investment as a cost because we suppose that it could be recovered if the business were sold. Of course it would depend on the type of business and how the $100,000 was used. In any case, losses of $80,000 is not the correct answer because if the money couldn't be recovered costs would include $40,000 (forgone salary) + $100,000 (lost investment) + $10,000 (forgone interest) or $150,000; so losses would be $90,000 if the initial investment could not be recovered. The real point of this question however, was to get at the forgone interest earnings as another cost.
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