The Opportunity Cost of Any Decision Is the Forgone Value

question 152

True/False

The opportunity cost of any decision is the forgone value of the next best alternative that is not chosen.

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Definitions:

WACC

The Weighted Average Cost of Capital, a calculation of a firm's capital cost that weighs each category of capital (equity, debt, etc.) proportionally.

Risk Level

A measure of the potential for loss in an investment or business decision.

Business Units

Distinct segments within a larger corporation, focused on specific product lines or market areas.

Weighted Average

An average in which each quantity to be averaged is assigned a weight, reflecting its importance or frequency relative to other quantities.