Refer to the Information Provided in Table 20 $\quad\quad\quad\quad\quad\quad$ Mexico $\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad$ Guatemala

question 52

Multiple Choice

Refer to the information provided in Table 20.1 below to answer the questions that follow.
Table 20.1 $\quad\quad\quad\quad\quad\quad$ Mexico $\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad\quad$ Guatemala
$\begin{array}{cccc}\begin{array}{c}\text { Oranges } \\\text { bushel/acre }\end{array} & \begin{array}{c}\text { Bananas } \\\text { bushel/acre }\end{array} & \begin{array}{c}\text { Oranges } \\\text { bushel/acre }\end{array} & \begin{array}{c}\text { Bananas } \\\text { bushel/acre }\end{array} \\\hline 200 & 0 & 50 & 0 \\160 & 40 & 40 & 20 \\120 & 80 & 30 & 40 \\80 & 120 & 20 & 60 \\40 & 160 & 10 & 80 \\0 & 200 & 0 & 100 \\\hline\end{array}$
-Refer to Table 20.1. In Guatemala, the opportunity cost of 1 bushel of bananas is

• A) 1/2 bushel of oranges.
• B) 1 bushels of oranges.
• C) 2 bushel of oranges.
• D) 4 bushels of oranges.

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Definitions:

Reinvestment Problem

The challenge of effectively reinvesting earnings or capital gains to achieve additional growth or income.

Multiple Solutions

Situations where more than one answer or approach can satisfy the conditions of a problem.

MIRR

Modified Internal Rate of Return, a financial measure used to evaluate the attractiveness of investments, taking into account the cost of capital and the reinvestment rate.

Cost of Capital

A minimum profit rate a business has to achieve on its ventures to sustain its market price and appeal to investors.