Question

Text Probietti 1.5 Question Help 0 ents Ben Cartwright runs the Wild West Wax Museum in Carson City, Nevada. The museum has been in business for 40 years and is a major tourist attraction. The total value of the museum's capital stock is $3.5 million, which Ben owns outrighi. This year, the museum earned a lot of $14 minon after out-of-pocket expenses. Without taking the opportunity cost of capital into account, this means that Ben is earning a 40 percent return on his capital. Suppose that risk-free bonds are currently paying a rate of 15 percent to those who buy them. What is meant by the opportunity cost of capital? ework Quiz/Test O A. The value of capital OB. The accounting cost of capital OC. The present discounted value of capital O D. The implicit cost of capital O E. The explicit cost of capital

Answer 1

Opportunity cost refers to implicit cost while explicit cost refers to costs which are accounted.

So, correct option is

The Implicit cost of capital