Joe wants to start his own business. The business he wants to start will require that he purchase a factory that costs $400,000. Joe currently has $500,000 in the bank earning 3 percent interest per year. Suppose Joe purchases the factory using $200,000 of his own money and $200,000 borrowed from a bank at an interest rate of 6 percent. What is Joe’s annual opportunity cost of purchasing the factory?

Harris fabrics computes its predetermined overhead rate annually on the basis of direct labor-hours. at the beginning of the year, it estimated that 34,000 direct labor-hours would be required for the period’s estimated level of production. the company also estimated $599,000 of fixed manufacturing overhead expenses for the coming period and variable manufacturing overhead of $3.00 per direct labor-hour. harris's actual manufacturing overhead for the year was $768,234 and its actual total direct labor was 34,500 hours. required: compute the company's predetermined overhead rate for the year. (round your answer to 2 decimal places.)