Andrew quits his job as an accountant where he earns $60,000 per year to go back to school for two years to get an mba degree. he attends a school that charges $25,000 per year for tuition and related expenses. how much is the total cost (explicit cost plus opportunity cost) of that degree?

Total cost = $ 50000+ $120000= $170000

Explanation:

For this case we know that the tuiton fee given $25000/year

Since he go back to school for two years the total explicit cost is given by:

Total explicit cost = $25000/year *2years = $50000

Since Andrew quits his job that represent an implicit cost that is given by:

Implicit Cost or Opportunity cost= $60000/year *2 years= $120000

And then we can find the total cost with this formula:

Total cost = Explicit cost + Opportunity cost

Total cost = $ 50000+ $120000= $170000

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