Chris is considering quitting his job as an editor to become a freelance editor operating out of his apartment. He currently earns $80,000 per year plus $15,000 in benefits. His expectation is that next year his compensation will increase by $5,000 but benefits will stay the same. If he becomes a freelance editor, he anticipates $150,000 per year in revenue starting next year. His labor, capital and materials costs are $40,000 per year starting next year. He will need to spend $200,000 this year to set up his office but will not have to repeat this spending in the foreseeable future. Hes planning on avoiding as much dept as possible, so hes financing this years costs out of his savings, for which he earns 5% per year. He pays $1,000 per month in rent ($12,000 per year) for his apartment and spends about $500 a month on food and transportation. Based on this information, Chris best economic decision is to do what?

Answers choices:

Freelance.

It doesn't matter. He is indifferent between the two options.

More information is required. It is impossible to know the opportunity costs without knowing the cost of labor relative to the cost of capital and materials.

Keep his current job.