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ozzi
3 years ago
6

Last month, you lent a work colleague $5000 to cover some overdue bills. He agreed to pay you in 1 month with interest at 2% for

the month, thus owing you $5100. Today, when the repayment is due, he asked you to extend the loan for another month and he would pay you the $5100 next month. In the meantime, you have had the offer to invest as much as you wish in an oil-well venture that is expected to pay 28% per year and a hot new IT stock that is estimated to return 45% the first year. If you let your colleague have another month, what is the opportunity cost of your decision
Business
1 answer:
Reika [66]3 years ago
5 0

Answer:

The opportunity costs of letting your colleague to extend the loan for another month are:

  • invest in oil-well venture = $5,100 x 28% = $1,428
  • invest in new IT stock = $5,100 x 45% = $2,295

Your total opportunity cost depends on what you actually decide to do with the money, if you invest all of it on the oil-well venture it is $1,428, or all of it in the new IT stock it is $2,295, but if you invest 50/50 on each, then the opportunity cost would be $1,861.50, or any other possible combination.

Opportunity costs are the extra costs or benefits lost from choosing one investment or activity over another alternative.

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3 years ago
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this is correct

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31. If a company initially records the purchase of supplies to the supplies expende account, the mount of the adjusting entry ma
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<h3>What is accounting period?</h3>

An accounting period is actually known to be the period of time that a particular accounting function is covered. It can be a fiscal year, quarterly, monthly or even weekly.

We see here that the amount of the adjusting entry that was made at the end of an accounting period will be equal to the supplies on hand at the end of the period.

Learn more about accounting period on brainly.com/question/26533843

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