Mathematics · Opportunity Cost
A bank is considering investing ₹50,00,000 in a new automated loan processing system that is expected to save the bank ₹12,00,000 per year in labor costs for the next 5 years. Alternatively, the bank could place that same ₹50,00,000 into a government bond yielding a guaranteed 8 percent annual interest. Calculate the Opportunity Cost of choosing the automated system over the government bond for the first year of the investment.
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1₹50,00,000
- 2₹8,00,000
- 3₹4,00,000✓
- 4₹12,00,000
Correct answer
₹4,00,000
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