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Elinore is asked to invest $ 5, 400 in a friend's business with the promise that the friend will repay $5,940 in one year's time.
Elinore is asked to invest $ 5, 400 in a friend's business with the promise that the friend will repay $5,940 in one year's time. Elinore finds her best alternative to thisinvestment, with similar risk, is one that will pay her $ 5,886 in one year's time. U.S. securities of similar term offer a rate of return of 77%. What is the opportunity cost of capital in this case?
A. 7%
B. 11%
C. 9%
D. 10%
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