A Recent College Graduate Has the Choice of Buying a New

question 29

Multiple Choice

A recent college graduate has the choice of buying a new car for $33,500 or investing the money for four years with an 8% expected annual rate of return.He has an investment of $40,000 in equities and bonds which yields 6% expected annual rate of return.If the graduate decides to purchase the car,the best estimate of the opportunity cost of that decision is ________.

• A) $2,400
• B) $10,720
• C) $40,000
• D) $9,600

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Definitions:

Evicted

The legal process by which a tenant is expelled from rented property, usually due to violation of a lease agreement.

Rent

Rent is a payment made by a tenant to a landlord in exchange for the use of a property, such as a house, apartment, or commercial space, for a specified time.

Evict

The legal process by which a landlord removes or forcibly ejects a tenant from rental property, typically due to violation of a rental agreement.

Pay the Rent

The act of compensating a landlord for the use of their property.