Dan is an entrepreneur who invests in commercial and residential real estate.He has a savings account with $100,000 that earns 1% APY.Dan wants to buy a house that will give him a monthly cash inflow of $200.What will opportunity cost of investing in the house be?

Question

Quizplus · Accepted Answer

The opportunity cost is the interest Dan would have earned on his savings account if he had not invested in the house. The interest earned on the savings account is $100,000 * 1% = $1,000.

Dan Is an Entrepreneur Who Invests in Commercial and Residential