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meriva
2 years ago
14

Reece has decided to start his own brewery. To purchase the necessary equipment, Reece withdrew $20,000 from his savings account

, which was earning 3% interest, and borrowed an additional $50,000 from the bank at an interest rate of 5%. What is Reece's annual opportunity cost of the financial capital that has been invested in the business?
Business
1 answer:
KengaRu [80]2 years ago
8 0

Answer:

The opportunity cost is the income earned from her balance on savings account at the interest rate of 3% per year that Reece would received if she had not opened her owned brewery business. This opportunity cost is $600 per year.

Explanation:

Please find the below for further explanation and calculations:

The opportunity cost per one year = Income earned on saving account per one year = 20,000 x 3% = $600;

The reason why it is an opportunity cost is because as a result of opening brewery business, Reece sacrifices the income earned on this saving, instead, she contributes the saving fund to her brewery business.

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Answer:

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Explanation:

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The annual tax rate is calculated in 100s, therefore we must divide $319,550 by $100 = 3,195.5 which will be rounded up to 3,196 100s.

Now we multiply 3,196 x $1.91 = $6,104.36

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Answer:

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Explanation:

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If the insurance company expects to pay $6,400 per year, they will have to charge $6,900 ($6,400 + $500) to cover their expenses and earn a $500 profit.

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A major concern with Social Security is the possibility that funds will not be available when today’s tax-payers retire to becom
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Read 2 more answers
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Answer: a. 2.8

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