A Recent College Graduate Has the Choice of Buying a New

question 47

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 11% expected annual rate of return. He has an investment of $41,000 in equities and bonds which yields 8% 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) $3,280
• B) $14,740
• C) $41,000
• D) $18,040

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Definitions:

Government Disability Payments

are financial benefits provided by the government to individuals who cannot work because of a disabling condition.

Supervised Settings

Environments where activities are monitored and controlled by qualified personnel, often ensuring safety and adherence to specific rules or standards.

Family Support

The assistance, comfort, and emotional sustenance provided by family members to each other, often crucial in times of illness or stress.

Tardive Dyskinesia

A neurological disorder characterized by involuntary, repetitive body movements, often resulting from long-term use of certain psychiatric medications.