Jane wins 100000 in a lottery and immediately uses her winni
Jane wins $100,000 in a lottery and immediately uses her winnings to open up a donuts shop. Her direct cost is $50,000, and she puts the remaining money in a savings account earning 10 percent annual interest. Alternatively, Jane could have placed all her lottery winnings in the 10 percent savings account. Jane\'s total cost of opening up a donuts shop is:
Solution
Jane\'s total cost = direct cost + interest forgone = 50000 + 10000 = 60,000
