Suppose the Best Investment You Could Make with $200,000 in Cash

Multiple Choice

Suppose the best investment you could make with $200,000 in cash is to purchase a government bond that pays 10 percent interest per year. If you decide to invest the money in your own business instead of buying the government bond, the opportunity cost of this financial capital is

A) $2,000 per year.
B) $200,000 per year.
C) $20,000 per year.
D) zero, because you already had the $200,000.