The Opportunity Cost to a Firm of Using an Asset

question 8

Multiple Choice

The opportunity cost to a firm of using an asset is zero if

• A) no money was spent to acquire the asset.
• B) the asset has no alternative uses.
• C) the asset was given to the firm for free.
• D) the asset has zero sunk costs associated with it.
• E) the asset is already owned by the firm.

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Definitions:

Earnings

The amount of money that a company makes from its activities, often reported as profit on a financial statement.

Restaurant

A business establishment where meals or refreshments may be purchased and consumed by patrons.

Weekdays

The days of the week excluding the weekend; typically refers to Monday through Friday.

Saturday

The seventh and final day of the week in many religious and calendar systems, considered as a day of rest and worship in some cultures.