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Carlos is asked to invest $4000 in a friend's business with the promise that the friend will repay $4610 in one year. Elinore finds her
Carlos is asked to invest $4000 in a friend's business with the promise that the friend will repay $4610 in one year. Elinore finds her best alternative to this investment, with similar risk, is one that will pay her $4500 in one year. U.S. securities of similar term offer a rate of return of 9%. What is the opportunity cost of capital in this case?
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