Joe wants to start his own business. The business he wants to start will require that he purchase a factory that costs $300,000. To finance this purchase, he will use $100,000 of his own money, on which he has been earning 10 percent interest. In addition, he will borrow $200,000, and he will pay 12 percent interest on that loan. For the first year of operation, what is the opportunity cost of purchasing the factory?

Suppose that it costs $5 to buy a coffee and takes 10 minutes of your time. In that time you could be working and earn $10, or spending time at the beach which you value at $5. What is the opportunity cost of the coffee?

During the current year an entity had in place $1 million of 6% loan finance and $2 million of 9% loan finance. It constructed a new factory which cost $600,000 and this was funded out of the existing loan finance. The factory took 8 months to complete.

Savannah wants to start a business, which she estimates will cost $9,885.00. If Savannah puts $9,085.00 into a savings account which earns 12% interest compounded continuously, how long will it be until she has enough money to start the business?

Suppose that a firm produces 200,000 units a year and sells them all for $10 each. The explicit costs of production are $1,500,000 and the implicit costs of production are $300,000. The firm earns an accounting profit of ________ and an economic profit of ________.Multiple Choice$500,000; $200,000$500,000; $1,700,000$1,700,000; $200,000$1,700,000; $500,000

Opportunity cost