Sunday

February 1, 2015

February 1, 2015

Posted by **Jim** on Monday, February 15, 2010 at 11:46pm.

- 11th grade economics -
**economyst**, Wednesday, February 17, 2010 at 1:40pmIn economics "captial" generally means one of two things. First is physical capital which is, as you state, a means of production e.g., machinery. The second is financial capital e.g., cash. Now then, it is a bit easier to relate financial capital to interest income. However, the same principals apply to both kinds of capital In particular, what is the opportunity cost of financial capital? Say you have a large pile of cash which you want to use for a business. The opportunity cost would be the foregone interest income that you would have received. And if you kept the cash in a bank and earned interest, the opportunity cost of that interest income is the foregone rate of return on investing.

I hope this helps.

**Answer this Question**

**Related Questions**

11th grade economics - Why is it that the reward for capital is interest? I don'...

7th grade math - if you borrow $1000 at 9% interest and pay it back over 1 1/2 ...

Quantitative Business Analysis - John runs a florist shop in a small Arkansas ...

Math - Serena wanst to borrow $15 000 an pay it back in 10 years. Interest rates...

Math - Sue can either borrow 10,000 dollars for 5 years with a simple interest ...

Maths - pauline paid $450 simple interest to borrow $20 000. The interest rate ...

Math - Serena wants to borrow $15 000 and pay it back in 10 years. Interest ...

comp - can you help me Underline the topic sentence for this paragraph??? ...

math - Defining capital structure weights) Templeton Extended Care Facilities, ...

finance - 14–1. (Defining capital structure weights) Templeton Extended Care ...