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andreev551 [17]
2 years ago
12

A contractor must decide between two jobs. One job is a bathroom renovation in a residential home. The other is the construction

of a
new detached garage. What is a potential opportunity cost if the contractor decides to do the bathroom?
A. the cost of materials and labor for the garage job
B. the net profit of installing the garage
C. the cost of materials and labor for the bathroom
D. the net profit of remodeling the bathroom
Business
1 answer:
PtichkaEL [24]2 years ago
8 0

Answer:

B: The net profit of installing the garage.

Explanation:

The opportunity cost is the next best thing that you could be doing but chose to give up in order to do something else. For example, if I chose to spend the day studying for a test, I won't have as much time to watch cat videos, hang out with my friends, or work on the website I'm coding. Since I love coding more than anything in the world, the time I could've spent coding is the opportunity cost of choosing to study.

A and C can be safely eliminated because they are describing the business expenses of the contractor, not what they could be missing out on if they choose to renovate the bathroom. In this case, D wouldn't make any sense since they wouldn't be missing out on any profits from the bathroom project at all. Therefore, the correct answer is B. The contractor can't be in two places at once, and by choosing the bathroom, they're passing up the opportunity to work on the garage and any resulting profits.

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The motive of this is to create some value added to the company products by considering the innovative ideas to attract the customers and maximize customer satisfaction that results to accomplish the company goals and objectives.

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Assume again that the cost of capital is 7 percent and the effective tax rate is 40 percent. How would the payback, internal rat
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4 0
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A company issues a​ ten-year bond at par with a coupon rate of 6.4​% paid​ semi-annually. The YTM at the beginning of the third
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Answer:

\mathbf{current  \ price \  of \  the \ bond=  \$848.78}

Explanation:

The current price of the bond can be calculated by using the formula:

current  \ price \  of \  the \ bond= ( coupon \times  \dfrac{ (1- \dfrac{1}{(1+YTM)^{no \ of \ period }})}{YTM} + \dfrac{Face \ Value }{(1+YTM ) ^{no \ of \ period}}

current  \ price \  of \  the \ bond= ( \dfrac{0.064 \times \$1000}{2} \times  \dfrac{ (1- \dfrac{1}{(1+ \dfrac{0.091}{2})^{8 \times 2}})}{\dfrac{0.091}{2}} + \dfrac{\$1000 }{(1+\dfrac{0.091}{2} ) ^{8 \times 2}})

current  \ price \  of \  the \ bond=  \$32 \times $11.19 + \$490.70

current  \ price \  of \  the \ bond=  \$358.08+ \$490.70

\mathbf{current  \ price \  of \  the \ bond=  \$848.78}

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