Question

suppose korie purchases the factory using $200,000 of her own money and $200,000 borrowed from a bank at an interest rate of 6 percent. what is korie's annual opportunity cost of purchasing the factory

Answer 1

The  Korie's annual opportunity cost of purchasing the factory is $18,000

Calculating the problem:

The calculation  of the  Korie's annual opportunity cost of purchasing the factory is shown below:

Opportunity cost =  interest on his money + interest paid on borrowed money

= (0.03) of ($200,000) + (0.06) of ($200,000)

= $6,000 + $12,000.

= $18,000

Hence,  Korie's annual opportunity cost of purchasing the factory is $18,000

What is opportunity cost and example?

“Opportunity cost” of a resource,  means the value of the next-highest-valued  use of that resource.  for example,  when you spend time and money watching  a movie, you can't spend that time at home reading a book, and you can not  spend the cost on books.

Learn more about Opportunity cost:

brainly.com/question/481029

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