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Justin Brimer owns his own taxi, for which he bought a $30,000 permit to operate two years ago. Mr. Brimer earns $38,000 a year operating as an independent but has the opportunity to sell the taxi and permit for $85,000 and take a position as dispatcher for Carter Taxi Co. The dispatcher position pays $30,000 a year for a 37-hour week. Driving his own taxi, Mr. Brimer works approximately 47 hours per week. If he sells his business, he will invest the $85,000 and can earn a 20 percent return. Required
A. Determine the opportunity cost of owning and operating the independent business.
B. Calculate the earnings operating as an independent
C. Calculate the earnings operating as a dispatcher.
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