Investing $1,000,000 in raw inventory today, mostly in Oil should allow Carsons Machinery to increase production and earn an additional $1,100,000 next year. This payoff would cover the investment today, plus a 10% return. Carson's trades on the S&P/TSX. They are currently able to borrow money at 5%, and are receiving 2% on their cash balances. The CEO has studied the history of returns on investments in Oil and believes that investors in this commodity can reasonably expect a 15% return. What is the opportunity cost of capital and does that make Carson's Machinery's investment a good idea under the circumstances?

2%, Yes

10%, No

15%, Yes

15%, No

10%, Yes