Purchase Solution

Opportunity cost of investment

Not what you're looking for?

Ask Custom Question

The Hopedale Inn invested in a 10-acre plot of land for future development 20 years ago. It purchased this land for $100000 and it could be sold today for $500000. The Hopedale Inn's average and incremental tax rates are 22% and 30%, respectively. The Inn is considering building a new lodging facility on this land.

Q: What is the opportunity cost of this investment?

Purchase this Solution
Solution Summary

Calculates opportunity cost of investment.

Solution Preview

The Hopedale Inn invested in a 10-acre plot of land for future development 20 years ago. It purchased this land for $100000 and it could be sold today for $500000. The Hopedale Inn's average and incremental tax rates are 22% and 30%, respectively. The Inn is ...

Purchase this Solution
Free BrainMass Quizzes
Transformational Leadership

This quiz covers the topic of transformational leadership. Specifically, this quiz covers the theories proposed by James MacGregor Burns and Bernard Bass. Students familiar with transformational leadership should easily be able to answer the questions detailed below.

Lean your Process

This quiz will help you understand the basic concepts of Lean.

Balance Sheet

The Fundamental Classified Balance Sheet. What to know to make it easy.

Change and Resistance within Organizations

This quiz intended to help students understand change and resistance in organizations

Basic Social Media Concepts

The quiz will test your knowledge on basic social media concepts.

View More Free Quizzes
Related BrainMass Solutions

  • Investment opportunity

    It will have gain of : =Investment *( Gain %-Cost %) =250000*(14%-7%) =$175000 Hence the organization should undertake this opportunity as its having gain of $175000. The response provides steps to compute the investment opportunity.

  • cost of capital,its components

    cost of capital means is the expected return from the investment. opportunity cost means the cost of the next alternative foregone as a result of making investment.

  • Evaluating a new investment opportunity

    446985 For investments involving significant risk, the cost of capital is equal to the.... 1. A financial manager evaluating a new investment opportunity should assess: only the cash requirements of the project.

  • Opportunity Cost & Capital Budgeting

    OPPORTUNITY COST PRINCIPLE The opportunity cost or alternative costs are the returns from the second best use of the organization's resources or here in this case the individual's capability.

  • Time Value of Money for Opportunity Cost Rates

    ANSWERS As implied by the name, an opportunity cost rate is the rate of return on an alternative investment with a similar risk as the project/investment being considered.

  • Cost of debt and discount rate

    Briefly explain how the discount rate, or the cost-of-capital, be used to represent the risk associated with a particular investment opportunity?

  • Capital Investment Decisions for Magnificent Modems, Inc.

    The term, expected annual cash inflows, and the cost of each opportunity are outlined in the following table. MMI has established the desired rate of return of 16 percent for these investment opportunities.

  • Investments

    332890 Firm's Current Investment Opportunity A firm's current investment opportunity schedule and the weighted marginal cost of capital schedule are shown below: Investment Opportunity IRR Initial Investment

  • Opportunity Cost and Capital Balance

    As per econlib, "opportunity cost" of a resource mean the value of the next-highest-valued alternative use of that resource."

View More Related Solutions