ENTREPRENEURIAL PLANNING
FINANCIAL PLANNING AND ANALYSIS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Opportunity cost of the manager’s time
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Motivates staff
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Doesn’t help to create a what-if analysis
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Sets targets and goals
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Detailed explanation-1: -The budget constraint is the boundary of the opportunity set-all possible combinations of consumption that someone can afford given the prices of goods and the individual’s income. Opportunity cost measures cost in terms of what must be given up in exchange.
Detailed explanation-2: -Opportunity cost (also known as “alternative cost, ‘’) is the difference between a project’s cost estimate and another option that must be foregone in order to implement the project. Every choice we make also means giving up another option.
Detailed explanation-3: -Opportunity cost is an excellent tool that helps calculate the benefits and downsides to each of these choices by assigning a value to both options. By understanding the true financial cost of each outcome, anyone can make more logical and beneficial decisions.