C Harvey quit his job at State Universitywhere he earned $45,000 a year. Hefigures his entrepreneurial talent orforegone entrepreneurial income to be$5,000 a year. To start the business, hecashed in $100,000 in bonds that earned10 percent interest annually to buy asoftware company, Extreme Gaming. In thefirst year, the firm sold 11,000 units ofsoftware at $75 for each unit. Of the $75per unit, $55 goes for the costs ofproduction, packaging, marketing,employee wages and benefits, and rent ona building.Refer to the above information. The cost ofcapital for Harvey in the first year is:Group of answer choicesA) $10,000B) Not enough informationC) $110,000D) $100,000E) There is $0 cost of capital associatedwith Harvey's new business

Cost of capital is amount you paid using the money.

Answered: Harvey quit his job at State University…

Harvey quit his job at State University where he earned $45,000 a year. He Figures his entrepreneurial talent or Foregone entrepreneurial income to be Vear To start the b ucinecc be

CONCEPTS IN FED.TAX.,2020-W/ACCESS

20th Edition

ISBN:9780357110362

Author:Murphy

Publisher:Murphy

Chapter14: Choice Of Business Entity—operations And Distributions

Section: Chapter Questions

Problem 74DC

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