Mosti, a Materials Engineer, Has Discovered a Groundbreaking New Way

Multiple Choice

Mosti, a materials engineer, has discovered a groundbreaking new way to make recycled plastic stronger.He is looking to exploit this discovery by starting up his own business at a cost of $500 000.Unfortunately Mosti has only $200 000 in savings and must borrow the other $300 000.If the interest rate is 10%, then what, according to an economist, is the opportunity cost of starting up the business?

A) $500,000 per annum
B) $50,000 per annum
C) $30,000 per annum
D) $20,000 per annum