James Numbercruncher is a Certified Public Accountant.He is currently a manager in the tax department of Earnest & Old, a large CPA firm.As a tax manager, James earns $120,000 per year.Recently, James and Michael Codehead, another tax manager at E&O, have been talking about starting their own accounting firm.If they start their own firm, they believe that first year revenues would be $430,000 and first year operating expenses would be $167,000.Firm profits would be split equally between James and Michael.

Salary $120,000

Revenues $430,000

Operating expenses $167,000

What would James' opportunity cost be if he decided to stay at E&O?Show your work.