Recall the Application about running a lawn-cutting business using solar-powered equipment to answer the following question(s).
-If you have $10,000 to start a lawn-cutting business, the interest rate is 4 percent, your cost of equipment is $3,000, and the earnings you sacrifice from working at another job are $32,000, your yearly cost of doing business would be
A) $13,000.
B) $13,400.
C) $35,400.
D) $45,000.

Question

Quizplus · Accepted Answer

The yearly cost of doing business includes the cost of equipment ($3,000) and the opportunity cost of not working another job ($32,000). The interest on the initial $10,000 investment at 4% is $400. Therefore, the total cost is $3,000 + $32,000 + $400 = $35,400.

Recall the Application About Running a Lawn-Cutting Business Using Solar-Powered