Investing

What is the opportunity cost of an investment quizlet?

The opportunity cost of capital is the best available expected return offered in the market on an investment of comparable risk and term to the cash flow being discounted.

You asked, what is the opportunity cost of an investment? Opportunity cost is the value of what you lose when you choose from two or more alternatives. It’s a core concept for both investing and life in general. When you invest, opportunity cost can be defined as the amount of money you might not earn by purchasing one asset instead of another.

Moreover, what is opportunity cost of investing in capital? The opportunity cost of capital is the incremental return on investment that a business foregoes when it elects to use funds for an internal project, rather than investing cash in a marketable security. … The opportunity cost of capital is the difference between the returns on the two projects.

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Quick Answer, what is opportunity cost give an example quizlet? The cost of making a choice is that the next best alternative is forgone. This is know as opportunity cost. For example if a Government decides to make the choice of devoting more resources to the NHS then the opportunity cost is devoting those resources into the education system.

Also the question is, what is an opportunity cost example? The opportunity cost is time spent studying and that money to spend on something else. A farmer chooses to plant wheat; the opportunity cost is planting a different crop, or an alternate use of the resources (land and farm equipment). A commuter takes the train to work instead of driving.Opportunity cost represents the quantum of profit that is let go, when an entity chooses one resource utilization alternative over another. Money costs are the actual cash (or credit) costs that an entity incurs during its business operations.

What is opportunity cost also known as?

Reduced cost aka ‘opportunity cost’ in linear programming.

What is opportunity cost equal to quizlet?

Opportunity Cost. is the value (not a benefit) of the choice of a best alternative cost while making a decision.

Which answer best defines opportunity cost quizlet?

Opportunity cost is defined as the value of the next best alternative. In this case your next best alternative is to get a five-dollar dinner at Burger Joint.

Which scenario is the best example of an opportunity cost quizlet?

Which scenario is the best example of an opportunity cost? A computer company produces fewer laptops to meet tablet demand.

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What is my opportunity cost?

Opportunity cost is the forgone benefit that would have been derived from an option not chosen. … Considering the value of opportunity costs can guide individuals and organizations to more profitable decision-making.

What is an example of opportunity cost in business?

Small businesses factor in opportunity costs when computing their operating expenses in order to provide a bid or estimate on the price of a job. For example, a landscaping firm may be bidding on two jobs each of which will use half of its equipment during a particular period of time.

What are the types of opportunity cost?

The two types of opportunity costs are explicit opportunity cost and implicit opportunity cost. Explicit opportunity cost has a direct monetary value.

Which of the following is the best example of opportunity cost?

Examples of Opportunity Cost. Someone gives up going to see a movie to study for a test in order to get a good grade. The opportunity cost is the cost of the movie and the enjoyment of seeing it. At the ice cream parlor, you have to choose between rocky road and strawberry.

What is opportunity cost in economics class 12?

Opportunity cost of an activity (or good) is equal to the value of the next best alternative foregone. It is the cost of foregone alternative.

What is opportunity cost in accounting?

Opportunity cost is the profit lost when one alternative is selected over another. … If you could have spent the money on a different investment that would have generated a return of 7%, then the 2% difference between the two alternatives is the foregone opportunity cost of this decision.

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Which cost is known as opportunity cost Mcq?

The opportunity cost of a given action is equal to the value foregone of all feasible alternative actions.

What is an opportunity cost in accounting quizlet?

opportunity costs are estimated forgone benefits from actions that could, but will not, be undertaken, in contrast, accounting is based on historical costs.

Which of the following best describes opportunity costs Choose 1 answer?

The Option c is correct Opportunity cost best describes when the difference between the value of the next best alternative forgone and the alternative selected is calculated.

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