The mathematical formulae of calculating the opportunity cost is;
Opportunity Cost = Cost of Selected Alternative – Cost of Next Best Alternative.
The selected alternative in this case is Woodbury University. The structured fee cost to study at Woodbury University is shown below.
FEES in $ 1st year 2nd year 3rd year 4th year
The total cost of Woodbury University is $ 2200+1200(6)
= $ 9400
The cost of the next best alternative is the salary I would have been getting given I did not attend Woodbury University. As a film salesperson, I would have been making 3010 dollars annually. Given that the Woodbury course takes four years, the assumed net salary would be:
= $ 9040
From the data, the opportunity cost is:
The opportunity cost is 360.
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