X hits on this document

115 views

0 shares

0 downloads

0 comments

34 / 42

What if we buy turf fertilizer 6 months before we need it,

  • What is the opportunity cost ?

The return that we could earn on the money had we decided not to store.

If you borrow money to buy corn or fertilizer to store, the interest cost is an accounting cost.

Well, if you buy turf fertilizer for the golf course 6 months before you are actually going to use it, that means you have pulled money out of the bank to pay for the fertilizer. Fertilizer does not pay interest. So when you pulled the money out of the bank, you started losing interest (an opportunity cost).

Document info
Document views115
Page views115
Page last viewedSun Dec 11 06:17:24 UTC 2016
Pages42
Paragraphs275
Words6220

Comments