Question 2 (10%)

Due to personal circumstances Daniella decided to change her career pass and quit the current job where she was earning a salary of $85,000 per year. She decided to start her own consultancy firm in a premises she owns. Previously she used to rent out the premises for $30,000 per annum.

After first year of operation, Daniella recorded the following expenses: salary for herself $50,000 and overhead expenses $15,000

1. Calculate accounting cost associated with Daniella's consultancy firm activities. (2 points)
2. Find the economic cost associated with Daniella's consultancy firm activities. When calculating economic cost, you must explain every number used and how did you find it. (8 points)