Opportunity cost is what an individual, firm or government forgoes in order to get something else. For example, an individual might have $2. A pen costs $2 likewise a notebook. If the person decides to buy the pen, the opportunity cost is the notebook which he or she did not buy.

With the money Sarah has, spending her entire budget will give her 40 cups of tea or 8 snacks. This implies that for 1 snack, the opportunity cost is (40/8) = 5 cups of tea

4 0

3 years ago

Elin wants to retire in 20 years when she turns 60. Elin wants to have enough money to replace 120% of her current income less w

xxMikexx [17]

Answer:

She needs :$4,045,303 for her retirement

Explanation.

Total all expenses and earnings

3 0

3 years ago

Joe and Rich are both considering investing in a project that costs $25,500 and is expected to produce cash inflows of $15,800 i

miv72 [106K]

Both Joe and Rich should accept this project.

D) Both Joe and Rich

<u>Explanation:</u>

NPVJoe= $25,500 + $15,800 / 1.085 + $15,300 / 1.085^2

NPVJoe= $2,058.88

NPVRich= –$25,500 + $15,800 / 1.125 + $15,300 / 1.125^2

NPVRich= $633.33

Here Joe and Rich both invested a total amount of $25,500 and they are expected to get cash inflows of $15,800 and $15,300 in the year 1 and year 2 respectively they both has their own different rates of return i.e. 8.5% and 12.5% so we can calculate the net principle value of Joe is $2,058.88 and that of Rich is $633.33.

8 0

3 years ago