Subjects finance

Relevant Increase Bc1Ed9

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Relevant Increase Bc1Ed9


1. **Stating the problem:** We are given an opportunity capital of 2950 and a carrying cost of 6700. We need to find the relevant increase. 2. **Understanding the terms:** Opportunity capital refers to the amount invested or capital at risk, and carrying cost is the cost associated with holding or carrying that capital. 3. **Formula:** The relevant increase can be interpreted as the increase in cost relative to the opportunity capital, calculated by the formula: $$\text{Relevant Increase} = \frac{\text{Carrying Cost} - \text{Opportunity Capital}}{\text{Opportunity Capital}} \times 100$$ 4. **Substitute the values:** $$\frac{6700 - 2950}{2950} \times 100 = \frac{3750}{2950} \times 100$$ 5. **Calculate the fraction:** $$\frac{3750}{2950} \approx 1.2712$$ 6. **Calculate the percentage:** $$1.2712 \times 100 = 127.12\%$$ 7. **Interpretation:** The relevant increase is approximately 127.12%, meaning the carrying cost is 127.12% higher than the opportunity capital.