qus-17

Sudheer earns $68,000 annually as a software architect in Chennai, India. He has applied for admission to the M.B.A program at York University. If accepted, he will resign and move to Toronto. Sudneer has assembled the following data to make the decision: (13 marks)

Sudheer's annual salary	$68,000
Annual tuition and fees	14,000
Annual book and supply expense	3,000
Monthly living expenses in Chennai	800
Monthly living expenses in Toronto	1,600
Monthly auto expenses in Chennai	350
Monthly auto expenses in Toronto	350
Cost of two business suits purchased just prior to resigning	600
Moving expenses	5,500

Required:

Calculate the following in the context of Sudheers decision: (i) Total sunk costs (if any) (ii) Total differential or incremental costs (if any) (iii) Total opportunity costs (if any)