Scenario 13-2 Joe Wants to Start His Own Business.The Business He Wants

Multiple Choice

Scenario 13-2
Joe wants to start his own business.The business he wants to start will require that he purchase a factory that costs $500,000.To finance this purchase, he will use $200,000 of his own money, on which he has been earning 10 percent interest per year.In addition, he will borrow $300,000, and he will pay 12 percent interest per year on that loan.
-Refer to Scenario 13-2.For the first year of operation,what is the opportunity cost of purchasing the factory

A) $10,000
B) $20,000
C) $34,000
D) $56,000