An opportunity cost is defined as: a. the potential lost sales that are forfeited when a...
An opportunity cost is defined as:
| a. |
the potential lost sales that are forfeited when a project is rejected. |
|
| b. |
a cost that has been incurred and can not be recouped. |
|
| c. |
the most valuable alternative that is given up if a particular investment is undertaken. |
|
| d. |
the increased cost incurred when a new project is accepted. |
|
| e. |
the increased sales of an existing product if a new product is added to a firm's offerings. |
Homework Answers
Answer is C
When an option is chosen from alternatives, the opportunity cost is the "cost" incurred by not enjoying the benefit associated with the best alternative choice.
the potential lost sales that are forfeited when a project is rejected, there is no opportunity cost associated cost when you reject a project. Opportunity cost is only there if you accept the project.
The cost that has been incurred and can not be recouped are sink costs, not opportunity cost.
the increased cost incurred when a new project is accepted is incremental cost.
the increased sales of an existing product if a new product is added to a firm's offerings.is incremental revenue.
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