Answer:
D. $65,000.
Explanation:
Implicit cost takes into account the alternatives that have been sacrificed. thus, alternatives sacrificed are interest on deposits (100,000 ×5%) and salary foregone (60,000)
Total implicit cost = 5,000 + 60,000
= 65,000
Answer:
D. $65,000.
Explanation:
The implicit cost is the return on factor of production from the best alternative to the current use.
In this case we have the capital of Tommy Wang which, can generate interest and their wages from his previous job
interest 100,000 x 5% = 5,000
lost wages 60,000
Total return 65,000