John invested $12,000 in the stock of Hyper Cyber. Eight years later, Hyper Cyber's shares reached $125,000, but John held onto the shares in the belief that their price would double in the next five years. Unfortunately, Hyper Cyber did not double. Rather the market value of John's shares today is $4,000. If the shares were sold today and the proceeds invested in another investment, they would likely earn 5% per annum. Which of the following terms and values is correct? a S250,000 is the opportunity cost $12.000 is the sunk cost b. $2.000 is the opportunity cost d. $125,000 is the opportunity cost of selling the shares today

John invested $12,000 in the stock of Hyper Cyber. Eight years later, Hyper Cyber's shares reached $125,000, but John held onto the shares in the belief that their price would double in the next five years. Unfortunately, Hyper Cyber did not double. Rather the market value of John's shares today is $4,000. If the shares were sold today and the proceeds invested in another investment, they would likely earn 5% per annum. Which of the following terms and values is correct? a S250,000 is the opportunity cost $12.000 is the sunk cost b. $2.000 is the opportunity cost d. $125,000 is the opportunity cost of selling the shares today

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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John invested $12,000 in the stock of Hyper Cyber. Eight years later, Hyper Cyber's shares reached $125,000, but John held onto the shares in the belief that their price would double in the next five years. Unfortunately, Hyper Cyber did not double. Rather the market value of John's shares today is S4,000. f the shares were sold and the proceeds invested in another investment, they would likely earm 5% per annum. Which of the following terms and values is correct? . A. S2000 is the opportunity cost • B. S125,000 is the opportunity cost of selling the shares today • C S250,000 is the opportunity cost • D. $12,000 is a sunk cost
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