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.Suppose Calvin purchases the factory using $200,000 of his own money and $200,000 borrowed from a bank at an interest rate of 6 percent.What is Calvin's annual opportunity cost of purchasing the factory?

Question

Quizplus · Accepted Answer

The Answer of 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.Suppose Calvin purchases the factory using $200,000 of his own money and $200,000 borrowed from a bank at an interest rate of 6 percent.What is Calvin's annual opportunity cost of purchasing the factory?

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