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Let's say you are deciding whether or not to start a new business. You are currently earning $50,000/year at your existing job. You plan to
Let's say you are deciding whether or not to start a new business. You are currently earning $50,000/year at your existing job. You plan to spend $10,000 of your savings to buy new equipment for the business. This $10,000 was previously in your savings account earning 2% interest per year. You expect the new business to earn $100,000/year, you will have $40,000 worth of employees' salaries to pay and the COGS will be $10,000. Given what you know about opportunity costs, would this be a profitable endeavor
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