Answers
(a)
Accounting cost = - Accounting income = - CHF 70,000 per year
Total accounting cost for 2 years = - CHF 70,000 x 2 = - CHF 140,000
(b)
Opportunity cost = Benefit foregone by serving in UN = CHF 75,000 per year
Total opportunity cost for 2 years = CHF 75,000 x 2 = CHF 150,000
(b)
Economic cost = Accounting cost + Opportunity cost = - CHF 70,000 + CHF 75,000 = CHF 5,000 per year
Total economic cost for 2 years = CHF 5,000 x 2 = CHF 10,000
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