Assume the firm's dividend is $3.44 this year, and that the required rate of return for the firm's industry is 10.2%. The firm's
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Answer:
The correct answer is 5.
Explanation:
Faruq's income is $100. The price of tacos is $10. The price of milkshakes is $2.
If Faruq spends all his income on tacos he will be able to purchase
=
= 10 tacos
If Faruq spends all his income on milkshakes he will be able to purchase
=
= 50 milkshakes
So out of his total income he can either have 50 milkshakes or 10 tacos.
The opportunity cost of a taco will be
=
=
= 5