Suppose Winston's annual salary as an accountant is $60,000, and his financial assets generate $4,000 per year in interest. One day, after deciding to be his own boss, he quits his job and uses his financial assets to establish a consulting business, which he runs out of his home. To run the business, he outlays $8,000 in cash to cover all the costs involved with running the business, and earns revenues of $150,000. What costs would be considered when calculating economic profit?
A. The opportunity cost of his job and interest forgone of $64,000, and the explicit cost of $8,000
B. The implicit cost of the interest forgone of $4,000 and the explicit cost of $8,000
C. The explicit cost of $8,000
D. The implicit cost of his job of $60,000 and the opportunity cost of forgone interest of $4,000
A. The opportunity cost of his job and interest forgone of $64,000, and the explicit cost of $8,000
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Answer the following statement true (T) or false (F)
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