From the course: Accounting Foundations: Making Business Decisions Using IRR and NPV

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The opportunity cost of cash under the mattress

The opportunity cost of cash under the mattress

From the course: Accounting Foundations: Making Business Decisions Using IRR and NPV

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The opportunity cost of cash under the mattress

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- Our hometown of Grantsville, Utah, had a population of about 2500 people when we were in high school. - Now, Grantsville has a population of 12,000 people and growing. - Lots of the fields that were empty when we were young are now being sold to real estate developers. - Here's what I think every time I drive through Grantsville these days. If I had been a smart teenager, I would have scraped together some money and bought as many acres of fields in Grantsville as I could. - Okay, let's run some numbers. Back 45 years ago when you were a teenager, how much would an acre-sized field in Grantsville have cost? - [Man Wearing Polo] 'About $500. And that same acre would be selling for about $12,000 now. From $500 up to $12,000. Yeah, I missed an opportunity. - And opportunity is the right word. But you're thinking about this in the wrong way. To do a proper comparison, you need to consider what else you could have…

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