Hal currently works as the fry guy at burger haven but is thinking of quitting his job to attend college full time next semester. which of the following would be considered an opportunity cost of attending college?
a) the cost of the cola that hal will consume during class
b) the cost of commuting to the burger haven job
c) the cost of the textbooks
d) hal's lost wages at burger haven

Option (d) is correct.

Explanation:

The opportunity cost refers to the cost of selecting some other alternative over other. It is the value of activity or the satisfaction obtained from the good foregone to choose other alternative.

In our case, if Hal decided to go to college then he have to left his job where he earned some money income.

Therefore, the opportunity cost of attending college is the money income that Hal lose as he could have earned that income.

The reason why we subtract depreciation in the calculation of EBIAT if we are going to add it back as the next step of the Free Cash Flow formula is because:

According to the  given question, we can see that we need to show why it is necessary to subtract depreciation when calculating the EBIAT in the Free Cash Flow formula.

As a result of this, we can see that when an asset depreciates, then according to the government, it is a taxable commodity which makes it important to remove it from the income statement so that it would be calculated together instead as a separate part.

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