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 theshares 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

Opportunity cost is something which has to be left off for selecting the other option. Sunk cost is…

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 and the proceeds invested in another investment, they would likely earn 5% per annum. Which of the following terms and values is correct? · A S2000 is the opportunity cost • B. $125,000 is the opportunity cost of selling the shares today C. S250.000 is the opportunity cost • D. $12.000 is a sunk cost

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 and the proceeds invested in another investment, they would likely earn 5% per annum. Which of the following terms and values is correct? · A S2000 is the opportunity cost • B. $125,000 is the opportunity cost of selling the shares today C. S250.000 is the opportunity cost • D. $12.000 is a sunk cost

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

20th Edition

ISBN:9780357110362

Author:Murphy

Publisher:Murphy

Chapter9: Acquisitions Of Property

Section: Chapter Questions

Problem 80IIP

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