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ou are asked to invest $8,000 in a friend's business with the promise that your friend will repay $9670 in two year. You find that
ou are asked to invest $8,000 in a friend's business with the promise that your friend will repay $9670 in two year. You find that the best alternative to this investment, with similar risk, is one that will pay you $10250 in two year. U.S. Treasuries of similar term offer a rate of return of 6.5%. What is your opportunity cost of capital in this case?
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The opportunity cost of capital is the return you could earn on your next best alternative investmen...
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Foundations of Finance The Logic and Practice of Financial Management
Authors: Arthur J. Keown, John D. Martin, J. William Petty
8th edition
132994879, 978-0132994873
