Suppose the Best Investment You Could Make with $100,000 in Cash

question 302

Multiple Choice

Suppose the best investment you could make with $100,000 in cash is to purchase a government bond that pays 14 percent interest per year. If you decide to invest the money in your own business instead of buying the government bond, the opportunity cost of this financial capital is

• A) $1,400 per year.
• B) $100,000 per year.
• C) $14,000 per year.
• D) zero, because you already had the $100,000.

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Definitions:

Analysis

The process of examining components or structures critically to understand them better or identify relationships.

Effectiveness

The degree to which objectives are achieved and the extent to which targeted problems are solved.

Statistical Analyses

Statistical Analyses involve the collection, examination, interpretation, and presentation of data to discover underlying patterns and trends, and to make decisions based on statistical evidence.

Independent Observations

Observations made without influence from other variables, ensuring unbiased and accurate data collection.