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Clark is employed by a company that currently pays him $90,000 per year. He owns a new car that he bought for cash of $39,000. Clark is thinking about returning to school to obtain a law degree. Tuition for the

Clark is employed by a company that currently pays him $90,000 per year. He owns a new car that he bought for cash of $39,000. Clark is thinking about returning to school to obtain a law degree. Tuition for the school he wants to attend is $29,000 per year, books cost an average $1,400 per year, and room and board is $17,980 per year.

Determine the total sunk cost and the total opportunity cost for Clark if he decides to go back to law school for three years.


Opportunity Cost
Opportunity cost is the profit lost when one alternative is selected over another. The Opportunity Cost refers to the expected returns from the second best alternative use of resources that are foregone due to the scarcity of resources such as land,...

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Accounting concepts and applications

Accounting concepts and applications

ISBN: 978-0538745482

11th Edition

Authors: Albrecht Stice, Stice Swain

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Question Details
Chapter # 15
Section: Practice Exercises
Problem: 31
Posted Date: December 27, 2011 10:55:59
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