lectur4-page7 - From this perspective, the interest cost is...

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Interest is really nothing more than the PRICE you pay for using someone else’s money. From this perspective, the interest cost would be considered an accounting cost or an explicit cost. Interest can also be the cost you incur from holding your own money as cash rather than depositing the funds in a financial institution.
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Unformatted text preview: From this perspective, the interest cost is considered an opportunity cost. Opportunity cost is basically what you sacrifice (give up) to choose one alternative over another. We will discuss opportunity cost in much greater detail later in the course. 7...
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This note was uploaded on 12/29/2011 for the course ECO 210 taught by Professor Malls during the Fall '10 term at SUNY Stony Brook.

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