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You are the manager of a medium-sized farm with 100 acres of workable land. You can farm the land yourself, rent the land to another farmer for $2,000 per acre, or sell the land to a developed for $40,000 per acre. You have an investment opportunity that pays a return of 6 percent a year. If you decide to farm the land yourself, your opportunity cost for a year will be

Respuesta :

Answer:

The opportunity cost for a year will be $240,000.

Explanation:

The opportunity cost of any decision is the second-best alternative that is given up or sacrificed.  

Here, the manager has a farm of 100 acres of land.  

If he sells it to a developer for $40,000 per acre, he will get $4,000,000 for the whole land.  

He can invest this amount and get an interest of 6% per year.  

The opportunity cost of keeping the farm to the manager himself will be

= 6% of $4,000,000

= [tex]\frac{6}{100}\ \times\ \$ 4,000,000[/tex]

= $240,000

ayushivara07

Answer:

other person is right

Explanation:

240,000 is the right answer