Scenario 13-1
Calvin wants to start his own business making candles. He can purchase a candle factory that costs $400,000. Calvin currently has $500,000 in the bank earning 3 percent interest per year.
-Refer to Scenario 13-1.If Calvin purchases the factory with his own money,what is the annual implicit opportunity cost of purchasing the factory?

Question

Quizplus · Accepted Answer

The implicit opportunity cost is the interest Calvin would forego by using his own money. $400,000 at 3% interest would earn $12,000 annually.

Scenario 13-1 Calvin Wants to Start His Own Business Making Candles. He