COST ACCOUNTING
INFORMATION FOR DECISION MAKING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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What a person gives up when making a decision is commonly called:
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the time value of money
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a personal risk
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an opportunity cost
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spontaneity
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Explanation:
Detailed explanation-1: -“Opportunity cost is the value of the next-best alternative when a decision is made; it’s what is given up, ” explains Andrea Caceres-Santamaria, senior economic education specialist at the St. Louis Fed, in a recent Page One Economics: Money and Missed Opportunities.
Detailed explanation-2: -Opportunity cost refers to what you have to give up to buy what you want in terms of other goods or services.
Detailed explanation-3: -In economics, opportunity cost represents the potential gain that is lost when choosing one investment choice over another. In short, it’s a value of the road not taken.
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