Scenario 13-5 Suppose That Emily Opens a Restaurant. She Receives a Loan

question 93

Multiple Choice

Scenario 13-5
Suppose that Emily opens a restaurant. She receives a loan from a bank for $200,000. She withdraws $100,000 from her personal savings account. The interest rate on the loan is 6%, and the interest rate on her savings account is 2%.
-Refer to Scenario 13-5. Emily's total opportunity cost of capital is

• A)$2,000.
• B)$4,000.
• C)$12,000.
• D)$14,000.

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Definitions:

Stock Market

The network of exchanges, brokers, and investors that trade in stocks.

Network of Investors

A group or community of individuals and organizations interested in investing in various opportunities, sharing risks, and exchanging knowledge.

Brokers

Individuals or firms that act as intermediaries between buyers and sellers in financial markets to facilitate transactions.

Raising Capital

The process by which a firm obtains money or funds to finance its operations, expansion, or investments.