A Business Is Considering a Cash Outlay of $250,000 for the Purchase

question 86

Multiple Choice

A business is considering a cash outlay of $250,000 for the purchase of land, which it intends to lease for $40,000 per year.If alternative investments are available that yield an 15% return, the opportunity cost of the purchase of the land is

• A) $45,000.
• B) $37,800.
• C) $47,200.
• D) $37,500.

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Definitions:

Opportunity Loss Table

A tabular representation used in decision making to outline the potential losses for not choosing the best alternative.

Expected Monetary Value

A statistical technique used to calculate the average outcome when the future includes scenarios that may or may not happen.

Dishwasher Designs

Various structural and functional configurations of dishwashers, including capacity, layout, and technology, to meet specific user needs or preferences.

Expected Monetary Value

The projected value of a financial transaction or decision, considering all possible outcomes weighted by their respective probabilities.