Question

If the going rate of interest were 10 percent and the expected profit rate were 18 percent, then the opportunity cost of a firm carrying out a $100,000 project for one year with its own funds would be?

Answer 1

If the going rate of interest were 10 percent and the expected profit rate were 18 percent, then the opportunity cost of a firm carrying out a $100,000 project for one year with its own funds would be$10,000.

SO

$100,000/10 =$10,000

Opportunity cost is the advantage that was lost because a particular option was not selected.

It is necessary to weigh the advantages and disadvantages of each choice offered in order to correctly assess opportunity costs.

Opportunity costs have a value that can help people and businesses make more lucrative decisions.

Opportunity cost is a wholly internal expense that is only utilized for strategic consideration; it is not included in accounting profit and is not reported externally.

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