If the Interest Rate on Saving Is 5 Percent Per

question 145

Multiple Choice

If the interest rate on saving is 5 percent per period, then the true opportunity cost of being paid $100 next period instead of this period is

• A)$5.
• B)$105.
• C)less than $5 if people suffer from a "defective telescopic faculty."
• D)more than $5 if people suffer from a "defective telescopic faculty."

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Definitions:

Entire Cost

This term is not clearly defined in general accounting or financial terminology; hence, it could be mistaken or too vague without further context. NO.

Income Taxes

Taxes imposed by the government on the income generated by businesses and individuals within their jurisdiction.

Capital Budgeting

A process businesses use to evaluate and select major investment projects, considering their potential for future profits.

Income Tax Expense

The cost incurred by businesses and individuals related to the taxes on their income, reflecting the amount of income tax that a company is obligated to pay to tax authorities.