Answer:
The cost of Larry going to college is $245, 500
Explanation:
Cost is the monetary value of materials or resources of producing a particular goods or rendering a particular service. it is also opportunity forgone in production and delivery of a good or service.
With regards to this question,
The total expenses borne if he goes to college is $120,000 + $30,000 + $3,500 = 153,500 (over the period of 4 years )
The opportunity cost of going to college is the total amount of income he would have made by working in a store over the period of years which he will spend in college. This will be the net income he is suppose to have made if he had not gone to college i.e the total income less the total expenses.
i.e 30,000 x 4 = 120,000
minus the expenses he is suppose to borne if he had not gone to college
7,000 x 4 = 28000
so, the net income if he had not gone to college is
120,000 - 28,000 = 92,000
Therefore, the cost of going to college for Larry will be equal to the cost incurred when he goes to college plus the opportunity cost of going to college i.e
153,500 + 92,000 = 245,5000
