Scenario 12-1
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 12-1.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?
A) $3,000
B) $6,000
C) $15,000
D) $18,000

Question

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The Answer of Scenario 12-1
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 12-1.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?
A) $3,000
B) $6,000
C) $15,000
D) $18,000

Scenario 12-1 Calvin Wants to Start His Own Business Making Candles.He Can