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

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 sa

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