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Pete has enough money to buy a new PC. He goes into a store and asks a salesperson about different brands. The salesperson says that their most expensive model is the best and that's the one that Pete would need if he wants to succeed in college. Pete is not sure whether he should trust her advice because of the salesperson's
Opportunity Costs
The cost of forgoing the next best alternative when making a decision, representing the benefits one misses out on.
Trading Costs
Expenses associated with buying and selling securities, including broker commissions and the bid-ask spread.
Total Costs
The sum of all expenses incurred in the production of goods or services, including both fixed and variable costs.
Net Present Value
A method used in capital budgeting to evaluate and compare the profitability of investments, which calculates the difference between the present value of cash inflows and outflows.
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