Answer:
The answer is option (C). $40,000
Explanation:
Lets consider Christine's total cost per for working as a consultant;
Total cost per year=cost of hiring administrative assistant+total rent on office space per year
where;
Cost of hiring administrative assistant=$15,000 per year
Total rent on office space per year=Amount paid per month×number of months in a year
Total rent on office space per year=(3,000×12)=$36,000 per year
replacing;
Total cost per year=(36,000+15,000)= $51,000
Net revenue=Total revenue per year-total cost per year
where;
Total revenue per year=$100,000
Total cost per year=$51,000
replacing;
Net revenue=(100,000-51,000)=$49,000
By choosing to work as a consultant she makes $49,000 a year, while losing the opportunity to earn $40,000 a year
Her opportunity cost=$40,000 a year
