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Question(s) / Instruction(s):

A business is considering a cash outlay of $500,000 for the purchase of land, which it could lease for $40,000 per year. If alternative investments are available which yield a 21% return, the opportunity cost of the purchase of the land is:

A.            $105,000

B.            $ 40,000

C.            $ 65,000

D.            $ 8,400

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