You are starting your own Internet business. You decide to form a company that w

Question

You are starting your own Internet business. You decide to form a company that will sell cookbooks online. Justcookbooks.com is scheduled to launch 6 months from today. You estimate that the annual cost of this business will be as follows: Technology (Web design and maintenance) $5,000 Postage and handling $1,000 Miscellaneous $3,000 Inventory of cookbooks $2,000 Equipment $4,000 Overhead $1,000 Part I Deliverable Length: You must give up your full-time job, which paid $50,000 per year, and you worked part-time for half of the year Suppose that you expect to sell about 22,000 cookbooks per month online, and assume your overhead, technology, and equipment costs are fixed. What are your total costs? The books will cost between $25 and $35 dollars Please tell me how to figure out total costs?

Explanation / Answer

The opportunity cost of job forgone is 50000*0.5 years*0.5 for partime = $12500, but generally opportunity cost should not be added here.

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