What is the opportunity cost of capital

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Chips USA is considering the following projects to improve their production process. Chips have a short life, so a 3-year horizon is used in evaluation. Which projects should be done if the budget is $70,000? What is the opportunity cost of capital?

Project First Cost Benefit

1 $20,000 $12,000

2 30,000 13,000

3 10,000 6,500

4 5,000 2,700

5 25,000 14,000

6 15,000 8,200

7 40,000 17,000

Reference no: EM133063995

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