If the $20 000 spent to purchase inventory could be invested and earn interest of $1200,then the opportunity cost of holding inventory is $20 000.

Name: If the $20 000 spent to purchase inventory could be invested and earn interest of $1200,then the opportunity cost of holding inventory is $20 000.
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The opportunity cost of holding inventory is $1,200, which is the interest that could have been earned if the $20,000 were invested instead of being used to purchase inventory.

If the $20 000 Spent to Purchase Inventory Could Be