Opportunity costs
Steve Denmark owns his own taxi, for which he bought an $18,000 permit to operate two years ago. Mr. Denmark earns $36,000 a year operating as an independent but has the opportunity to sell the taxi and permit for $73,000 and take a position as dispatcher for Sartino Taxi Co. The dispatcher position pays $31,000 a year for a 40-hour week. Driving his own taxi, Mr. Denmark works approximately 55 hours per week. If he sells his business, he will invest the $73,000 and can earn a 10 percent return.
Required
a.Determine the opportunity cost of owning and operating the independent business.
b. Based solely on financial considerations, should Mr. Denmark sell the taxi and accept the position as dispatcher?
c. Discuss the qualitative as well as quantitative factors that Mr. Denmark should consider.
We need at least 10 more requests to produce the solution.
0 / 10 have requested this problem solution
The more requests, the faster the answer.