Registered retirement savings plan

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Reference no: EM133078615

Mu Ying has recently received a $40 000 inheritance from her father. She has considering using the money in three possible ways (in no particular order of preference):

a-Invest it in a Registered Retirement Savings Plan (RRSP)

b-Purchase a new car

c-Pay off her education debt from going through law school

Questions:

(i) What is Mu Ying's accounting cost and opportunity cost if she decides to off her education debt? Please explain...

(ii) Suppose once again that Mu Ying decides to pay off her debt, but she reveals that she prefers purchasing the new car to investment in the RRSP. What is the opportunity cost of paying off her education debt in this case? Explain...

(iii) Is it possible for Mu Ying's opportunity cost of paying off her debt to be both the new car and investment in the RRSP? Explain...

Reference no: EM133078615

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