Scenario 12-5
Suppose that Emily opens a restaurant.She receives a loan from a bank for $200,000.She withdraws $100,000 from her personal savings account.The interest rate on the loan is 6%,and the interest rate on her savings account is 2%.
-Refer to Scenario 12-5.Emily's total opportunity cost of capital is

Question

Quizplus · Accepted Answer

The opportunity cost of capital includes the interest she pays on the loan ($200,000 * 6% = $12,000) and the interest she foregoes from her savings ($100,000 * 2% = $2,000), totaling $14,000.

Scenario 12-5 Suppose That Emily Opens a Restaurant.She Receives a Loan from Loan