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# Opportunity Cost and Capital Balance

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1. I bought my car for \$28,000 five years ago, it is now worth \$16,000 (net of selling expenses). I want to use my car in a new taxi business that I am starting. What is the correct opportunity cost that should be used in calculating the NPV of my taxi service?

2. If the working capital balance was \$140,000 at the end of 2011 and was \$100,000 at the end of 2012. What is the incremental investment in working capital for 2012?

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1. I bought my car for 28,000 five years ago, it is now worth 16,000 (net of selling expenses). I want to use my car in a new taxi business that I am starting. What is the correct opportunity cost that should be used in calculating the NPV of my taxi service?

Opportunity cost is ...

#### Solution Summary

Solution helps in estimating the incremental investment in working capital for 2012

\$2.49