Answer:
Designs by Candice
Her costs include:
Costs of materials, labor, overheads.
Then in charging her customers she would include the profit target of $7,623 (representing 11% of her capital investment).
Explanation:
As a graphic design studio, Design by Candice would buy stationery and design materials, including 3D printers and other software. Candice would also incur labor costs on those doing the design proper. There are also manufacturing overheads, including rent, utilities, etc. and not to forget other indirect costs like selling and marketing and administrative expenses.
Answer:
0.09 or 9%
Explanation:
This question has some irregularities. The correct question should be :
Elinore is asked to invest $4,900 in a friend's business with the promise that the friend will repay $5,390 in one year's time. Elinore finds her best alternative to this investment, with similar risk, is one that will pay her $ 5,341 in one year's time. U.S. securities of similar term offer a rate of return of 7%. What is the opportunity cost of capital in this case?
Solution
Given from the question
Investment (I) = $4,900
Return on investment (ROI) in one year = $5,341
Rate or opportunity cost of capital r is given by
ROI = I × (1 + r)
input the given data
$5,341 = $4,900 (1 + r)
$5,341 = $4,900 + $4,900r
$5,341 - $4,900 = $4,900r
r = ($5,341 - $4,900) / $4,900
r = 0.09
Or 9% in percentage
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