An owner withdraws ₹ 10,000 from his personalbank account and puchaes a machinery for the business. Identify the explicit costand implicit cost.

An owner withdraws ₹ 10,000 from his personalbank account and puchae

1.	An owner withdraws ₹ 10,000 from his personalbank account and puchaes a machinery for the business. Identify the explicit costand implicit cost.
Answer» Solution :Imputed intereston amount WITHDRAWN from bank' is the implicit COST as the OWNER WOULDHAVE earned the interestif the amountremained in the bank. "Amount of `₹10,000` paid to purchase the machinery" is theexplicit cost as it is ACTUAL money expenditure.