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3 years ago

The opportunity cost of a decision is measured in terms of

Business

1 answer:

Neko [114]3 years ago

5 0

Answer:

4. the next best thing given up. the price of a new opportunity that arises.

Explanation:

The opportunity cost is the cost we incurr when we choose something instead of other alternatives. To put it more simply: it the cost of the alternatives that we give up when we choose something.

For example, suppose I have $1,000 and have two options: 1) putting the money on a savings account that pays 2% annual interest 2) buying and Iphone X.

If I put the money on the savings account, the opportunity cost is the lack of enjoyment that and Iphone X would have provided me.

And if I bought the Iphone X, the opportunity cost would be the lack of interest earned on the deposit.

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bought 2,000 shares of Print Company stock for $12,780. She sold the stock for $7 per share and paid a sales commission of $26.

Svetach [21]

Answer:

$1,194

Explanation:

The buying price of the shares was $12,780

The selling price was $7 dollars for each.

The total amount realized is 2000 share x $ 7

=$14,000

The commission paid is $26

Net amount obtained is $14,000 -$26

=$13,974

Profit will be $13,974 -$12,780

=$1,194

6 0

3 years ago

Which of the following are true about productive efficiency? I. All available resources are employed in production. II. Workers

dalvyx [7]

Answer:

III. Points on the PPF curve are the only ones that achieve "productive efficiency"

Explanation:

What is true about productive efficiency is that Points on the PPF curve are the only ones that achieve "productive efficiency".

Productive efficiency is an economic term that is concerned with producing goods and services with the optimal combination of inputs to produce maximum output for the minimum cost.

For it to be said that an economy is productively efficient means the economy must be producing on its production possibility frontier

Hence productive efficiency happens when production is reportedly occurring along a production possibility frontier (PPF).

7 0

3 years ago

What is the gain or loss from purchasing a put option on $100,000 face value Treasury bonds with a strike price of $90,000 (90 p

Klio2033 [76]

Answer:

Profit of $8,500

Explanation:

Strike Price = $90,000

Premium = $1,500

Break even point = Strike price - Premium

Break even point = $90,000 - $150

Break even point = $88500

Profit = Break even point - Share price

Profit = $88,500 - $80,000

Profit = $8,500

7 0

3 years ago

Nicki paid $900 for a camera that she thought was worth $1100 for all the features included in it. for the consumer electronics

FinnZ [79.3K]

Consumer surplus is difference between the amount that consumers are willing and able to pay for a good or service

In this case, Nicki is willing to pay $1,100 for the camera, but she is only asked to pay 900. So Nicki has a consumer surplus of $200

7 0

3 years ago

After deciding to acquire a new car, you realize you can either lease the car or purchase it with a three-year loan. The car you

muminat

Answer:

a. $15,369.28

b. $16,332.28

c. $19,347.60

Explanation:

a. What is the present value of purchasing the car?

PV of resale = SP ÷ (1 + r)^n ................................................. (1)

Where SP = Resales proceed = $20,500

r = discount rate = 6% annually = 0.06 annually = (0.06 ÷ 12) monthly = 0.005 monthly

n = number of periods = 3 years = 3 × 12 = 36 months

Substituting into equation (1), we have:

PV of resale = $20,500 ÷ (1 + 0.005)^36 = $17,130.7208354753

Net PV = Purchase price - PV of resale

= $32,500 - $17,130.7208354753

Net PV = $15,369.28

Therefore, the present value of purchasing the car $15,369.28.

b. What is the present value of leasing the car?

PV of future period payment can be calculated using the following formula:

PV of monthly payment = M × 1 - (1 + r)^-n ÷ r .......................................... (2)

Where,

M = monthly payment = $494

r = discount rate = 6% annually = 0.06 annually = (0.06 ÷ 12) monthly = 0.005 monthly

n = number of periods = 3 years = 3 × 12 = 36 months

Substituting into equation (2), we have:

PV of monthly payment = $494 × {[1 - (1 + 0.005)^-36] ÷ 0.005}

PV of monthly payment = $16,238.2820221969

PV of leasing the car = Today's payment + PV of monthly payment

= $94 + $16,238.2820221969

PV of leasing the car = $16,332.28

Therefore, PV of leasing the car is $16,332.28.

c. What break-even resale price in three years would make you indifferent between buying and leasing?

This will be calculated by equating the PV of leasing the car to the difference between the purchase price and the PV of resale as follows:

PV of leasing car = Purchase price - PV of resale

$16,332.28 = $32,500 - PV of resale

Solving for PV of resale, we have:

PV of resale = $16,167.72.

The future value (FV) of resale price in 3 years can be calculated as follows:

FV of resale = PV of resale × (1 + r)^n

FV of resale = $16,167.72 × (1 + 0.005)^36 = $19,347.60

Therefore, the break even resale price in 3 years is $19,347.60.

7 0

3 years ago