A Business Is Considering a Cash Outlay of $500,000 for the Purchase

question 75

Multiple Choice

A business is considering a cash outlay of $500,000 for the purchase of land, which it could lease for $40,000 per year.If alternative investments are available that yield a 21% return, the opportunity cost of the purchase of the land is:

• A) $105,000.
• B) $40,000.
• C) $65,000.
• D) $8,400.

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