To start up a two person partnership law firm, the partners each invest $125,000 of their own funds. If the partners could have earned 5 percent return on these funds in another endeavor, what is their competitive return?

Question

Quizplus · Accepted Answer

The total amount invested by the partners is $250,000 (125,000 + 125,000). If they could have earned a 5 percent return on these funds, that would be $12,500 each (0.05 x 125,000). Therefore, their competitive return is $12,500.

To Start Up a Two Person Partnership Law Firm, the Partners