ACCOUNTING
Multiple Choice
A recent college graduate has the choice of buying a new auto for $20,000 or investing the money for four years with a 6% expected rate of return. If the graduate decides to purchase the auto, the BEST estimate of the opportunity cost of that decision is
a. $1,200.
b. $4,800.
c. $20,000.
d. zero since there is no opportunity cost for this decision.
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